2010 Annual Report Crisil

Ready for the next level.
17,500 SME Irevnas

11 of the Acquired
worlds top
15 investment
Polish and Argentinian
are Irevnas clients. Strong growth in
to make markets function better globally. in the global corporate sector. Strong banks are
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footprint in the global corporate sector. Firmly positioned
the largest provider of equity research in India. Acquired Pipal Research to expand our
operations. Poised to become
Polish and Argentinian
are Irevnas clients. Strong growth in
top 15 investment
11 of the worlds
17,500 SME
mark in credit ratings.
6,000
Research
our footprint in the global
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operations.
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Acquired
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are Irevnas
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Research to expand
2011
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Research to expand
better
globally.
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top 6,000 the worldsPolish15 investment in banks
function better globally.

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and
to make
are
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Firmly positioned
sector space.
corporate
17,500
ratings.
ratings. 11 of
SME
Poised
the
clients. Strong
function better globally.6,000 SME mark in credit ratings. ratings. clients. Poised to 11 Strong become the largest growth of the
are Irevnas
markets
to make
positioned
worlds top 15
in Polish
and
equity
contents
corporate overview
02 - CRISIL - Making markets function better 04 - CRISILs Businesses 08 - CRISIL Consolidated Ten Year Financial Highlights 10 - Events
For more details visit www.crisil.com
12 - Publications
financial statements
16 - Board of Directors 20 - Directors Report 53 - Standalone financial statements 85 - Consolidated financial statements 111 - Notice 115 - Proxy Form and Attendance Slip
statutory reports
30 - Management Discussion and Analysis Report 36 - Auditors Certificate for Corporate Governance 38 - Report of the Directors on Corporate Governance 48 - General Information for Members
2010 - a glance
14 - Corporate Sustainability Initiatives
We built scale in 2010, which will enable us to be a force in the financial markets as never before.
6,000 mark in credit ratings. 17,500 SME ratings makes us Indias largest SME rating agency. 11 of the worlds top 15 investment banks are Irevnas clients. Strong growth in Polish and Argentinian operations. Poised to become the largest provider of equity research in India. Acquired Pipal Research to expand our footprint in the global corporate sector. Firmly positioned to make markets function better globally.
CRISIL Limited
corporate overview
CRISIL - Making markets function better CRISIl Businesses
CRISIL - MAKING MARKETS FUNCTION BETTER
Who We Are
CRISIl is a global analytical company providing ratings, research, and risk and policy advisory services. We are Indias leading ratings agency. We are also the foremost provider of high-end research to the worlds largest banks and leading corporations. With sustainable competitive advantage arising from our strong brand, unmatched credibility, market leadership across businesses, and large customer base, we deliver analysis, opinions, and solutions that make markets function better. Our defining trait is our ability to convert data and information into expert judgements and forecasts across a wide range of domains, with deep expertise and complete objectivity. At the core of our credibility, built up assiduously over the years, are our values: Integrity, Independence, Analytical Rigour, Commitment and Innovation. CRISILs majority shareholder is Standard and Poors (S&P). Standard & Poors, a part of The McGraw-Hill Companies (NYSE:MHP), is the worlds foremost provider of credit ratings.
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Who We Serve
We address a rich and globallydiversified client base. Within India our customers range from small enterprises to the largest corporations and financial institutions; outside India our customers include the worlds largest banks and leading corporations. We also work with governments and policy-makers in India and other emerging markets in the infrastructure domain.
How We Add Value

We empower our customers, and the markets at large, with independent analysis, benchmarks and tools. These help lenders and borrowers, issuers and investors, regulators, and market intermediaries make better-informed investment and business decisions. Our offerings allow markets and market participants to become more transparent and efficient - by mitigating and managing risk, taking pricing decisions, generating more revenue, reducing time to market and enhancing returns. By helping shape public policy on infrastructure in emerging markets, we help catalyse economic growth and development in these countries.
We empower our customers, and the markets at large, with independent analysis, benchmarks and tools. These help lenders and borrowers, issuers and investors, regulators, and market intermediaries make better-informed investment and business At market decisions. Our offerings allow markets and the core of our credibility, built up assiduously over the years, are our values: participants to become more transparent and efficient - Integrity, Independence, Analytical Rigour, by mitigating and managing risk, taking pricing decisions, Innovation. Commitment and generating more revenue, reducing time to market and 03 enhancing returns.
CRISIL Limited
corporate overview
CRISIl - Making markets function better CRISIL businesses
CRISIl buSIneSSeS
CRISIL Limited
RATINGS RESEARCH ADVISORY*
Bond Ratings Bank loan Ratings SME Ratings CRISIl Real Estate Star Ratings Education Grading
GLobaL ReSeaRCH & anaLytICS Irevna Pipal Research
CRISIL InfRaStRuCtuRe aDvISoRy
GLobaL anaLytICaL CentRe
InDIa ReSeaRCH CRISIl Centre for Economic Research Industry Research Capital Market Research
Mutual Funds Fixed Income Research & Valuation Equities
CRISIL RISk SoLutIonS
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* Wholly-owned subsidiary - CRISIl Risk and Infrastructure Solutions limited
a.
RATINGS
CRISIL is Indias first, largest, and most prominent credit rating agency. CRISIl pioneered the concept of credit rating in India more than 20 years ago, and has played a pivotal role in the development of Indias debt market. CRISIl has rated more than 10,000 borrowers, covering around 32,400 debt instruments of a value exceeding Rs.36 trillion. CRISIl has also rated around 17,500 Small and Medium Enterprises (SMEs), and has the highest number of SME ratings outstanding in India. Today, CRISIl rates two-thirds of corporate bonds outstanding in India. CRISIls Global Analytical Centre (GAC) supports the Global Resource Management initiative of Standard & Poors (S&P). GAC supports analytical processes and information processing, executes complex modelling assignments, and assists Standard & Poors (S&P) in improving workflow efficiencies. B1.a. Irevna Irevna provides high-end financial research and analytics to investment banks, insurance companies, and asset management firms across the world. Irevnas teams of highlytrained professionals at research centres in Buenos Aires in Argentina, Chennai and Mumbai in India, and Wroclaw in Poland, provide coverage across time zones to the worlds major financial centres. Irevna is now preparing to commence operations in China.
Works with 11 of the top 15 global investment banks. Best-in-class service and talent base. quality
At the right locations and in the right time zones to deliver maximum value to clients.
Rs. 36 trillion of debt rated. Market share in bank loan ratings exceeds 50 per cent. Rates two-thirds of outstanding in India. bonds
B1.b. Pipal Research Pipal Research is a leading knowledge services firm delivering high-quality financial and business research to organisations worldwide. Its clients include leading global firms in the telecommunications, technology, consumer packaged goods, and industrial sectors, and in the financial services space. Pipal has three research centres in India (Gurgaon, Noida and Bangalore), and an office in Chicago. CRISIl acquired Pipal in December 2010. Pipals services, clients and delivery locations are complementary to Irevnas, enabling the combine to strengthen its leadership in the global research & analytics.
Highest number of outstanding SME ratings in India.
b.
RESEARCH
b1. Global Research and analytics Services CRISIl is the leading provider of highend research and analytics to the world`s largest financial institutions and leading global corporations. Operating from seven research centres around the world, CRISIls Global Research & Analytics business delivers insight driven high end financial and business research.
Client list includes 30 fortune 500 companies, across a range of industries.
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CRISIL Limited
corporate overview
CRISIl - Making markets function better CRISIL businesses
CRISIl buSIneSSeS (contd.)

b2. India Research B2.a. CRISIl`s Centre Research (C-CER) for Economic B2.c. Capital Market Research
CRISIl Centre for Economic Research (C-CER) offers a credible, objective, and analytical view on the Indian economy. It also provides premium services and products based on economic analysis. C-CERs core strength is its solid understanding of macroeconomics, financial economics, public finance, and environmental economics, coupled with its deep knowledge of real-world dynamics.
largest independent equity research house in India. Official provider of valuations to all mutual funds in India. Helps employees provident fund organisation (EPFO) select fund managers.
Among the most credible commentators on the Indian economy. The foundation of CRISIls integrated research capabilities.
Mutual Fund Research CRISIl Fund Services CRISIL Fund Services (CFS) is Indias leading provider of services, tools, and indices to mutual funds, provident funds, and wealth managers. Its mutual fund rankings have been the industry standard for mutual fund evaluation in India for more than a decade. Fixed Income Research & Valuation
B2.b. Industry Research CRISIl Research is Indias largest independent research house, providing comprehensive research coverage to more than 1200 Indian and global customers. It also provides incisive customised research, enabling customers to take sharper business and investment decisions. With Cutting Edge, its recentlyintroduced service, CRISIl Research is adding a globally unique dimension of customisability to the provision of Research services.
CRISIl provides valuations for all debt instruments to the entire mutual funds industry. Banks, custodians, pension funds, and life insurers also use this service to value their fixed income portfolios. CRISIl is the sole provider of standard indices for debt and hybrid portfolios. All fund houses benchmark the performance of their funds to these indices. Equity Research CRISIl Equity Research provides independent equity research and initial public offer (IPO) grading. CRISIl has released 81 research reports, many of them on companies that were previously thinly researched or had no research at all outstanding. CRISIl received a prestigious mandate to publish reports on companies listed on the National Stock Exchange of India.
Provides coverage industries.
on
65
90% of Indias commercial banks are our customers.
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C.
CRISIL RISk AND INFRASTRuCTuRE SOLuTIONS (CRIS)

CRIS is a wholly-owned subsidiary of CRISIl. CRIS offers a wide range of solutions focused on infrastructure policy, corporate advisory, integrated risk management and associated consulting services, to a variety of clients including government bodies, multilaterals, banks, and infrastructure companies. CRIS operates through its divisions CRISIl Infrastructure Advisory and CRISIl Risk Solutions.
Practical and innovative solutions in 31 countries. Client roster includes 50 financial institutions in India and abroad. Flagship product, RAM, is Indias leading internal risk rating solution.
C1. CRISIl Infrastructure Advisory CRISIls infrastructure advisory activities range from developing enabling legislation and proactive sector policies to undertaking feasibility studies and assisting with reforms through public-private partnerships in energy, urban infrastructure, and transportation.
C2. CRISIL Risk Solutions (CRS) Business CRISIL Risk Solutions (CRS) Business deploys its unique experience and skills in the areas of credit and market risk to provide a comprehensive slate of risk-related services. It partners leading public and private sector banks for enterprise risk management and Basel II preparedness.
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CRISIL Limited
corporate overview
CRISIL Consolidated ten year financial Highlights
CRISIl CONSOlIDATED ten yeaR fInanCIaL HIGHLIGHtS

InCoMe fRoM opeRatIonS
(Rs. in Crores) (Rs. in Crores)
ebItDa
73
628 537
Other Income
CAGR
29%
287 140 119 85
515 404
CAGR
27%
7 4 30 3 35 2 39 81
22 9 179 117
23 199 215
3 32
5 30
68
71
Mar Mar Mar Mar Dec Dec Dec Dec Dec Dec 02 03 04 05 05 06 07 08 09 10
(9 months)
(9 months)
pRofIt afteR taX

(Rs. in Crores)
205 161
CAGR
39%
84 61 25 19 20
141
12
17
(9 months)
MaRket CapItaLISatIon
(Rs. in Crores)
DIvIDenD
100
(Rs. per share)
4254
CAGR
42%
1521 1008 438 312
3212 2663 1773 70 25 6.5 10 10 12.5 15 10
100 100
196
158
(9 months) Special Dividend
08
(9 months)
epS
(Rs.)
net WoRtH peR SHaRe

(Rs.)
285
600 556
CAGR
37%
118 88 31 31 35
223 195 280 200 165 146 110 126 383
495
19
27
(9 months)
(9 months)
RetuRn on net WoRtH

(%)
50
44 41 38
36
23 17
23 20
21
(9 months)
Revenue peR eMpLoyee

(Rs. in Lakhs)
pat peR eMpLoyee

(Rs. in Lakhs)
29.35 28.94 27.20 25.57 22.93 7.59 7.80
8.63
22.12 21.53 20.15 19.26 19.96
5.17 4.79 4.36 4.34 3.14 3.50 3.80
Mar Mar Mar Mar Dec Dec Dec Dec Dec Dec* 02 03 04 05 05 06 07 08 09 10
(9 months#) # Annualised
Mar Mar Mar Mar Dec Dec Dec Dec Dec Dec* 02 03 04 05 05 06 07 08 09 10
(9 months #) * Excluding Pipal
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CRISIL Limited
2010 - a glance
events Publications Corporate Sustainability Initiatives
eventS
CRISIL and S&P seminar, The New Normal, Mumbai
(From L to R) Deven Sharma - President, Standard & Poors, and Chairman, CRISIL, Raman uberoi - Senior Director, CRISIl Ratings, thomas Schiller - Executive Managing Director and Region Head, Standard & Poors, Asia Pacific, Roopa kudva - Managing Director and Chief Executive Officer, CRISIL, and Region Head, South Asia, Standard & Poors, William Hess - Director, Sovereign and International Public Finance Ratings, Standard & Poors, at the seminar, The New Normal: The Changing Face of Financial Markets, organised jointly by CRISIL and Standard & Poors, to discuss the fundamental shift in the functioning of economies, governments, regulators, and businesses, and how the world is adjusting to this new reality.
CRISIl knowledge partner at the India PPP Conclave, Delhi
Mr. pranab Mukherjee, Minister for Finance, Government of India, addresses the Second India PPP Conclave, organised by the Department of Economic Affairs, Ministry of Finance, in cooperation with the World Bank. As knowledge partners to the event, CRISIl provided valuable insights into the renewable energy space.
CRISIl - Irevna : Global Derivatives Trading and Risk Management conference 2010, Paris
CNBC TV -18 CRISIL Mutual Fund of the Year Award 2010, Mumbai
(From L to R) anshuman prasad - Head, Global Derivatives, Irevna, vishal thakkar - Director, Business Development - Europe, Irevna, Chris Graham - Director, Business Development - North America, Irevna, at the Global Derivatives Trading and Risk Management 2010 conference sponsored by CRISIl. Irevna displayed its cutting edge research in the derivatives and risk management domains.
(From L to R) k n vaidyanathan - Executive Director of the Securities and Exchange Board of India (SEBI), Roopa kudva, and C b bhave - Chairman, SEBI. The awards are based on CRISILs objective and analytically rigorous fund ranking methodology.
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CRISIL and S&P: World Bank Singapore Infrastructure Finance Summit 2010, Singapore
(From L to R) nguyen Hong truong - Vice Minister for Transportation, Vietnam, Li Zuwei - Chairman, Chongqing Expressway Group, Sinthya Roesly - President Director, Indonesia Infrastructure Guarantee Fund, kamran khan - Program Director, World Bank-Singapore Urban Hub, kevin Lu - Regional Director, Asia Pacific, Multilateral Investment Guarantee Agency, Mark Rathbone - Asia Leader, Global Capital Projects & Infrastructure team, PricewaterhouseCoopers, James Harris Head, Asia Infrastructure and Project Finance Practice, Hogan Lovells and pratyush prashant Director, CRISIl Risk and Infrastructure Solutions, at a panel discussion on Showcase of Regional Government Initiatives - Pushing the Boundaries. CRISIL and Standard & Poors were associate sponsors at the World Bank-Singapore Infrastructure Finance Summit 2010, showcasing our global local expertise.
CRISIl and NSE seminar: Independent Equity Research, Mumbai
CRISIl Real Estate Star Ratings launch, Mumbai
(From L to R) k G Gupta - Managing Director, GKB Ophthalmics, Chitra Ramakrishna - Joint Managing Director, National Stock Exchange of India, Roopa kudva, prashant Jain Executive Director & Chief Investment Officer, HDFC Asset Management Company, avinash Deshpande - Whole-time Director, Eimco Elecon, at a seminar Independent Equity Research: Empowering Investors, organised jointly with National Stock Exchange (NSE), aimed at educating retail and institutional investors about the benefits of independent equity research.
Roopa kudva and akash Deep Jyoti - Head, Corporate & Infrastructure Ratings, CRISIL Ratings, at the event to launch CRISIl Real Estate Star Ratings (CREST). CREST provides a city-specific, all-round assessment of real estate projects and helps buyers benchmark and identify quality projects within a city.
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CRISIL Limited
2010 - a glance
Events publications Corporate Sustainability Initiatives
pubLICatIonS
CRISIl Ratings
1. SME Insights Series
CRISIls SME Insight Series provides unique perspectives on the working of SMEs and the challenges they face. Four volumes on topical themes have been published.
2. Insight into Risk - Pharmaceuticals Sector

An overview and outlook on key trends in the credit quality of Indias pharmaceutical sector.
3. Insight into Risk - CRISIl Default Study 2009

A detailed analysis of default rates, showcasing CRISIl Ratings strong defaultprediction abilities. For the first time in India, the default and transition statistics of an agencys rated entities have been computed using monthly data, giving investors an even clearer picture of the performance of CRISIls ratings.
4. Insight into Risk - Housing Finance Sector

A snapshot of key trends in the housing finance company (HFC) segment in India, and the financials of CRISIL-rated HFCs.
CRISIl Research
5. SME: Sector and Cluster Attractiveness
A report on key SME sectors and clusters, covering the demand growth drivers, outlook, factors influencing the competitiveness of clusters, and success stories of the various SME sectors.
6. City Real(i)ty Report

A ready-reckoner on emerging trends in the realty sector in ten leading Indian cities. This subscription-based report also provides an outlook on the sector, and updates key developments on a monthly basis.
7. Urban India Construction Reports

A compendium on 10 cities in India, published jointly by McGraw-Hill Construction and CRISIL Research. The reports provide an overview of market size and funding patterns, and carry details on key projects and the profiles of key Indian construction sector players.
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CRISIl Research (contd.)

8. S&P CRISIL Indices Versus Active Funds (SPIVA) Report
The S&P CRISIL SPIVA Scorecard compares the performance of Indian mutual funds across various time periods against appropriate indices, to provide an unbiased scorecard of active and passive fund management. The report highlights the growth in Indias working population, the current trends in the existing labour participation and unemployment rate, and the key challenges (labour mismatch and shortage) that could affect Indias economic growth and create a fiscal burden to support the unemployed. An insightful publication on how the inherent strength of Indias domestic demand will help it sustain 8.4 per cent annual growth over the next five years, and identifies five supply-side bottlenecks that would need to be addressed for placing India on a sustained 10 per cent growth trajectory. A special monthly publication on Indian macroeconomy, industry and financial markets for private circulation amongst senior policy makers and bank chairmen.
9. Skilling India: The Billion People Challenge
10. India: Raising the Growth Bar
11. Ecomonitor:
CRISIl Infrastructure Advisory

12. Indian Power Sector
CRISIl Infrastructure Advisory published a background paper Indian Power Sector: Integrated Planning and Implementation XIIth Plan and Beyond as knowledge partner of the India Electricity 2010 Conference, jointly organised by the Ministry of Power, Government of India, and the Federation of Indian Chambers of Commerce and Industry (FICCI).
12.
13. PPP Online Toolkit and Compendium

A web-based PPP toolkit, and a compendium of PPP case studies, were developed in association with Economic Consulting Associates (ECA), uk. These were launched by the Finance Minister, Mr. Pranab Mukherjee, at the Second India PPP Conclave, organised by the Department of Economic Affairs, Ministry of Finance, in cooperation with the World Bank.
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CRISIL Limited
2010 - a glance
Events Publications Corporate Sustainability Initiatives
CORPORATE SuSTAINABILITY InItIatIveS

CRISIl for Sustainable Development
A brief account of CRISIls corporate sustainable development initiatives during 2010:
a.
GREEN INITIATIVES
CRISIl House received lEED India Platinum rating, the highest green building certification.
CRISIl House, the state-of-the-art, eco-friendly building in Mumbai, received the leadership in Energy and Environment Design (LEED) India Platinum rating. This is the highest green building certification under the LEED rating system. CRISIL House has also been certified one of the most energy-efficient buildings in India. As part of its green initiative, CRISIl also consolidated its information technology infrastructure, driving a 40 per cent reduction in its server footprint.
b.
FINANCIAl INClUSION
CRISIl Ratings partnered with Intellectual Capital Advisory Services Pvt ltd at a two-day seminar, Srijan Financial Inclusion Forum 2010, attended by a large number of micro finance institutions (MFIs), bankers and lenders to MFIs, investors and multi-lateral organisations. The partnership entails providing critical inputs and perspectives on the MFI sector to enable a better understanding of the issues affecting them.
c.
INClUSIVE GROWTH FOR SMEs
CRISIL tied up with Doordarshan (DD) and National Small Industries Corporation (NSIC) to make a series of 13 episodes on Kamyabi Ki Udaan for Small and Medium Enterprises. This tie-up helps address a key challenge faced by small entrepreneurs: access to knowledge and expertise.
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d.
MAKING AND FACIlITATING DONATIONS
CRISIls culture of giving continues - steadily growing employee contributions improve the lives of the underprivileged.
CRISIl partners a number of nongovernmental organisations (NGOs) to ensure that CRISIlites have many options and opportunities to donate.
Our Joy of Giving Week was held in two phases: Pledge your Eyes, and Clothes and Toys Donation. Introduced in CRISIl for the first time, the Pledge your Eyes campaign received an overwhelming response, with in Mumbai, more than 200 personsCRISIlites and their family membersregistering and received the leadership in pledging their eyes. The Clothes and Toys Energy and Environment Design Donation drive, launched in partnership with a number of NGOs, saw more than 5400 (LEED) India articles of clothing and toys being donated by CRISIlites. These were distributed This is among the underprivileged during Diwali.
building
of-the -art, eco- friendly
state-
CRISIl House, the
Platinum rating.
the highest green building certificatio
Under the McGraw-Hill initiated Global Volunteer Day (GVD) activities, CRISIL conducted the Build and Tree Plantation drives. Under the same initiative, in partnership with SMIlE Foundation, CRISIlites across locations spent a day with underprivileged children, playing games, and organising dance and art competitions. More than 160 CRISIlites participated in the GVD activities, spreading joy and happiness among the needy. CRISIl also assisted employees to form volunteer groups, and enabled them to choose and work on specific projects or with NGOs. In 2010, three such groups were formed to work on projects/with NGOs of their choice. CRISIls association with Give India for the payroll giving programme continues; close to 300 employees have signed up.
under the rating system. CRISIl House has also been certified one of the most
lEED
Balanced growth includes social responsibility, a
en key element of CRISIls erg y- corporate philosophy. eff ic ient

buildings in India.
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CRISIL Limited
statutory reports
board of Directors Directors Report Management Discussion and Analysis
BOARD OF DIReCtoRS
1
1. Mr. Deven Sharma, Chairman
Deven Sharma is President of Standard & Poors, a part of The McGraw-Hill Companies, and the worlds foremost provider of independent credit ratings. Mr. Sharma joined Standard & Poors in 2007 as Executive Vice President, Investment Service and Global Sales. Before joining Standard & Poors, he was Executive Vice President, Global Strategy, at The McGraw-Hill Companies for five years. Mr. Sharma joined The McGraw-Hill Companies in January 2002 from BoozAllen & Hamilton, a global management consulting company, where he was a partner. During his 14 years with that firm, he provided guidance to client companies on business strategy and globalization, as well as on branding and sales management. Much of his experience includes work with global corporations in U.S., latin America, Europe and parts of Asia. Before joining BoozAllen, Mr. Sharma worked with manufacturing companies, Dresser Industries and Anderson Strathclyde. Mr. Sharma holds a bachelors degree from the Birla Institute of Technology in India, a masters degree from the University of Wisconsin and a doctoral degree in Business Management from Ohio State University. He has authored several publications on competitive strategy, customer solutions, sales and marketing. Mr. Sharma is also a member of the Council on Foreign Relations and the International Advisory Board of the British-American Business Council and serves on the Asia Society Business Council.
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2. Mr. bv bhargava, Director
Mr. BV Bhargava has been associated with CRISIl since 1992, and was Chairman from May 1999 to July 2008. He is Chairman of CRISIls Rating Committee. He was associated with ICICI limited for three decades, and retired as Vice-Chairman and Managing Director in 1996. He was associated with the Tariff Commission of India and the Indian Investment Centre, New York. He is on the Board of ICICI lombard General Insurance Company limited, Supreme Industries limited, Grasim Industries Limited, L&T Infrastructure Finance Limited, L&T Finance Holdings Limited, and other companies.
3. Mr. Hn Sinor, Director

Mr. HN Sinor started his career in 1965 with Central Bank of India and in 1969 moved to Union Bank of India where he worked for 28 years. In 1996, he was appointed Executive Director of Central Bank of India. In 1997, he joined ICICI Bank as Executive Director and took over later as Managing Director and CEO of the bank. After the merger of ICICI with ICICI Bank, in March, 2002, he worked as Joint Managing Director until May 2003. Thereafter, he joined the Indian Banks Association as Chief Executive and held this position until July 2008. He was appointed Chief Executive Officer of the Association of Mutual Funds of India (AMFI) in February 2010. He is also on the boards of 3i Infotech limited, ICICI lombard General Insurance Company limited, ICICI Venture Funds Management Co. limited, Tata Investment Corporation limited, Tata Motors Finance limited,
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5
Tata Capital limited, and several other Companies. hedge fund (Quantitative Financial Strategies) for three years. He has worked with ICICI from 1987 to 2007 in a variety of positions, including Corporate Planning, Project Finance, Rural Finance, and Treasury, and was a member of its Board of Directors from 2001 to 2007. From October 2007 to August 2010, he assisted ICICI in setting up a philanthropic foundation, the ICICI Foundation for Inclusive Growth, and served as its founding President. He is now the Chairman of the Boards of Sughavazhvu Health Care, CARE India, and IFMR Trust, and is closely involved in the evolution of these three organisations. Dr. Mor is currently also an independent member of a few other Boards including IKP Trust; IKP Centre for Technologies in Public Health; IKP Centre for Advancement in Agricultural Practice; and the Institute for Financial Management and Research. In the past he has served as the Chairman of the Fixed Income Money Market and Derivatives Association of India for two years, and as a Board Member of Wipro Limited for five years.
4. Ms. Rama bijapurkar, Director

Ms. Rama Bijapurkar is a recognised thought leader on marketing strategy and consumer related issues in India. She is an independent management consultant and works across a wide range of organisations in diverse sectors helping them develop market-focused business strategy. Her prior work experience in market strategy consulting and market research includes Mckinsey & Co., MARG (Marketing and Research Group) and MODE Services. She is an independent director on the board of some of Indias most respected organizations and is also a visiting faculty and on the board of governors at the Indian Institute of Management (IIM) Ahmedabad, from where she also holds a post graduate diploma in management. She also holds a B.Sc. (Hons) degree in Physics from Delhi University. She is the author of Winning in the Indian Market (John Wiley and sons), the Indian edition of which is titled We are like that only - Understanding the logic of Consumer India (Penguin).
6. Mr. thomas Schiller, Director

Mr. Thomas Schiller is Executive Managing Director and Region Head for Standard & Poors business in Asia-Pacific. He assumed this position in August 2004 and is responsible for further developing Standard & Poors leading position in the regions financial markets. He helped build Standard & Poors strong regional franchise through a series of management and market development positions held over the years, including Tokyo Office Head, Chief Marketing Officer for Asia-
5. Dr. nachiket Mor, Director

Dr. Nachiket Mor is a Yale World Fellow; has a Ph.D. in Economics from the University of Pennsylvania with a specialization in Finance from the Wharton School; an MBA from the Indian Institute of Management, Ahmedabad; and an undergraduate degree in Physics from the Mumbai University. While completing his Ph.D., he was associated with a Philadelphia-based
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CRISIL Limited
statutory reports
board of Directors Directors Report Management Discussion and Analysis
BOARD OF DIReCtoRS (contd.)
8
Pacific, and, most recently, Managing Director and Region Head for Standard & Poors in Japan and korea. He joined Standard & Poors in 1987 as a Corporate analyst in the Industrial Ratings group. American Bar Association. He is a member of Law Society of England & Wales, Chartered Institute of Arbitrators, london, and the Supreme Court Bar Association. He is a consultant to the World Bank and Organisation for Economic Co-Operation and Development (OECD). He is the country representative for Sweet & Maxells International Company & Commercial Law Review, and has authored India chapters in two books, Product Liability in Asia Pacific and Employment laws in Asia. He holds bachelors degrees in commerce and law from Delhi University. He is admitted to practice law in India as an Advocate and as a Solicitor of the Supreme Court of England and Wales.
7. Mr. David pearce, Director

Mr. David Pearce joined Standard & Poors in 1997 when McGraw-Hill acquired Micropal, where he was Group Financial Controller. Following this, he served as Finance Director for Standard & Poors Funds Services. More recently Mr. Pearce was Vice President and European Controller for the McGrawHill Companies. In July 2002, he took up the position of Vice President, European Finance for Standard & Poors providing strategic and managerial direction for Standard & Poors European financial operations. In early 2006, he was promoted to Senior Vice President, Finance for Standard & Poors Europe/Asia.
9. Ms. Roopa kudva, Managing Director and Chief Executive Officer

Ms. Roopa Kudva is Managing Director and Chief Executive Officer of CRISIL and Region Head, South Asia, Standard & Poors. Prior to this, she was the Executive Director and Chief Rating Officer of CRISIL. She is also a member of Standard & Poors Asia-Pacific Executive Committee. She joined CRISIL in 1992. She has worked in emerging markets in the Mediterranean and Middle Eastern countries during her secondment to Standard & Poors, Paris, as Director, Financial Institutions Ratings. Previously, she worked at Industrial Development Bank of India for six years in the Project Finance department. She is a graduate in Statistics and a post-graduate in management from IIM, Ahmedabad.
8. Mr. Ravinder Singhania, Director

(Alternate to Thomas Schiller, David Pearce and Deven Sharma)
Mr. Ravinder Singhania is the Managing Partner of Singhania & Partners, Solicitors & Advocates. Mr. Singhania currently serves on the boards of several multinational companies Indian subsidiaries such as America Online, Fedders Corporation, National Instruments, and American Bureau of Shipping, as well as listed companies such as Unitech limited. He is a former governing body Member of the Indian Council of Arbitration, and Vice Chairman of the Asia Pacific Committee of the
18
Senior Management
Mr. Raman Uberoi Mr. GV Mani Mr. Mukesh Agarwal Mr. M Ramsekhar Mr. Arun Panicker Senior Director - Ratings Senior Director - Global Research and Analytics Director - Research CEO - CRISIL Risk and Infrastructure Solutions Limited Senior Director - Operations
Allotment Committee
Dr. Nachiket Mor, Chairman Ms. Rama Bijapurkar Ms. Roopa Kudva
Rating Committee
Mr. BV Bhargava, Chairman Ms. Roopa Kudva
Auditors Audit Committee

Mr. HN Sinor, Chairman Mr. BV Bhargava Dr. Nachiket Mor Mr. David Pearce Messrs. S. R. Batliboi & Co.
Solicitors
Messrs. Wadia Ghandy & Co.
Company Secretary Compensation Committee

Mr. BV Bhargava, Chairman Mr. Deven Sharma Ms. Rama Bijapurkar Mr. Thomas Schiller Mr. HN Sinor Mr. Shrikant Dev
Bankers
ICICI Bank limited Andhra Bank Indian Overseas Bank
Investment Committee
Mr. BV Bhargava, Chairman Mr. Thomas Schiller Mr. David Pearce Ms. Roopa Kudva
Share Transfer Agent

Karvy ComputerShare Private limited Karvy House, 21, Avenue 4, Plot No.17 to 24, Near Image Hospital Vittalrao Nagar, Madhapur. Hyderabad 500 081
Investor Grievance Committee

Mr. BV Bhargava, Chairman Mr. Thomas Schiller Ms. Roopa Kudva
Registered Office
CRISIl House, Central Avenue, Hiranandani Business Park, Powai, Mumbai 400 076.
19
statutory reports
Board of Directors Directors Report Management Discussion and Analysis
Directors RepoRt
Dear Members,
the Directors are pleased to present the 24th Annual report of crisiL Limited, along with the audited accounts for the year ended December 31, 2010.
PerforMAnce
A summary of the Companys financial performance in 2010 is given below: (rupees Lakh) Year ended December 31, 2010 total income for the year was Profit before depreciation and taxes was Deducting depreciation of Profit before tax was Deducting taxes of Profit after tax was the proposed appropriations are: Dividend Corporate Dividend Tax General Reserve Balance carried forward is 14,417.96 2,387.67 1,957.54 23,553.37 7,225.00 1,227.89 1,503.37 22,741.09 60,233.44 26,918.21 2,020.85 24,897.36 5,321.90 19,575.46 Year ended December 31, 2009 46,445.36 20,422.09 1,387.93 19,034.16 4,000.44 15,033.72
DiViDenD
The Directors recommend, for approval of the members at the Annual General Meeting to be held on April 15, 2011, payment of final dividend of Rs. 25 per share for the year under review. During the year, the Company paid first, second and third interim dividends of Rs. 25 per share each. The Company also paid a special dividend of Rs. 100 per share. The total dividend for the year works out to Rs. 200 per share as against rs.100 per share in 2009.
BUYBAcK of eQUitY sHAres

The Board of Directors, at its meeting held on September 9, 2010, approved the buyback of equity shares of the Company for a total consideration not exceeding Rs. 80 crore and at a price not exceeding Rs. 6500 per equity share of Rs.10 each from the open market through the stock exchanges. The Company received shareholders approval through postal ballot for the buyback on October 18, 2010 and issued a public announcement on october 20, 2010. The buyback commenced on November 3, 2010 and closed on November 10, 2010. The Company bought back 128,156 equity shares at an average price of Rs. 6199.87 per equity share. The paid-up equity share capital of the Company (pre and post buyback of shares) is as follows:share capital of the company (Pre and Post Buyback) sr no. Particulars 1. 2. 3. Paid up Equity Share Capital (Pre Buyback) Total Equity Shares bought back Paid up Equity Share Capital (Post Buyback) no. of shares 72,25,000 1,28,156 70,96,844 share capital (rupees) 7,22,50,000 12,81,560 7,09,68,440
20
cros sed mile sto ne of
17, 500
ratings;
small and medium
enterprises (sMe)
7800 new sMe

ratings assigned in 2010 Launched
Strong credibility, a track record of being first to market with new products and processes, and a large customer base have geared CRISIL for the next level.
crisiL real
(cre st)
e s t a t e star
rating, a
its-kind
investors
service for retail
f i r s t -of-
real
in the
estate
sector
reView of oPerAtions A. RAtINGS

Highlights Over 5500 bank loan ratings (BLR) outstanding, the largest number of BLR in India; 2434 new ratings assigned during the year crossed milestone of 17,500 small and medium enterprises (sMe) ratings; 7800 new sMe ratings assigned in 2010 Launched CRISIL Real Estate Star (CREST) Rating, a first-of-its-kind service for retail investors in the real estate sector Expanded operations at Global Analytical Centre (GAC) to support Standard & Poors (S&P) Business environment The business environment remained steady for Ratings for the better part of 2010, except for the last quarter of the year, when liquidity constraints led to a sharp increase in interest rates and impacted fresh debt issuances. Indias corporate bond market was active during the year, with interest rates at the short and long-term ends remaining attractive, and the investment climate turning positive. Issuances of commercial paper (CP) gathered momentum, with volumes growing by 50 per cent over the previous year. There were also bond issuances from entities rated A and BBB by CRISIL, a positive trend for indias corporate bond market. Bank loan ratings maintained steady growth. the number of sMe ratings continued to grow rapidly, backed by increasing acceptance by banks. S&Ps demand for support from GAC continued to grow steadily in line with S&Ps focus on deeper analysis, and quicker response to market, and on improving data accuracy and enhancing support for its products.
21
statutory reports
The bond markets are expected to remain subdued in the initial period of 2011 as liquidity conditions are expected to remain tight with the monetary policy focusing on controlling inflationary pressures. However, the long term prospects remain strong with substantial demand for funds from infrastructure companies and the need for the financial sector to tap the bond market for funding the Indian economys growth. CP issuances are also expected to increase, driven by the introduction of base rates in the banking sector. the BLr market is likely to remain steady in 2011, as banks become increasingly compliant with Basel II requirements. The demand for SME ratings is expected to remain robust in 2011. GACs operations are expected to maintain their growth momentum in 2011, fuelled by recovery in the global credit markets and S&Ps continuing focus on extending its leadership in the global financial information, data and, analytics businesses. operations crisiL ratings maintained its market leadership in 2010, backed by a steady performance in BLrs and strong growth in sMe ratings. During the year, crisiL assigned 2434 new BLrs and 7800 sMe ratings. To manage the increasing volume of business, processes and work flows were upgraded to maintain quality of output and timeliness of delivery. Analytical teams received additional training to keep them abreast of global and local developments. These measures have ensured that CRISIL is current on all its ratings and rating publications, despite significantly increased volumes. In 2010, CRISIL Ratings assigned Indias first-ever ratings for securitisation of toll-road receivables, and multiple-asset securitisation of microfinance institution (MFI) loans. These set the trend for a number of similar transactions. CRISIL Real Estate Star (CREST) Ratings, a first-of-its-kind service for Indias fast-growing real estate sector, provides a city-specific all-round assessment of real estate projects, and helps buyers benchmark and identify quality projects within a city. The product has received an encouraging response from all stakeholdersdevelopers, buyers, investors, and bankers. CRISIL has already evaluated 29 projects across 10 cities. CRISIL continued to conduct regular outreach programmes for the benefit of investors and market participants. Around 150 seminars, including the crisiL Leadership series for BLr customers, and MSME CEO conferences for SMEs, were conducted across the country; these seminars helped extend crisiLs reach to more than 8500 companies and bankers across the country. CRISIL also published Indias first-ever comprehensive report on the performance of all outstanding structured finance transactions. CRISIL Ratings commentaries, including those on the introduction of base rate, floating savings rate, capital provision for real estate assets, capital infusion by Government of india (Goi) in public sector banks, impact of 3G license on telecom companies, and Gois fertiliser policy changes, received extensive media coverage. GAC continued to be an active partner in S&Ps initiatives to adapt to the evolving regulatory environment, and penetrated the commercial fixed income data and analytics segment. With the revival of the global economy, the demand for S&Ps ratings and McGraw-Hill Financials data/information services is expected to grow. This will translate into increasing requirements for GAC support. GAC is well positioned to strengthen its relationship with S&P, and maintain its growth trajectory.
22
B. ReSeARCH
B.1. GLoBAL ReSeARCH & ANALYtICS B.1.a. IReVNA Highlights Expanded geographic presence with sales office in Sydney and research centre in China Ranked # 1 firm in the world in financial services research, risk management and actuarial services, corporate finance support and financial services analytics by the Black Book of Outsourcing a Datamonitor company. Business environment The slowdown in the global financial markets in 2008-09 had a positive impact on the global analytics and research industry, with customers looking increasingly to research providers such as Irevna as a strategic means of restructuring their businesses. Demand for Irevnas services remained buoyant through 2010, driving robust growth in business volumes. Investments in new services such as actuarial and risk analytics, and in expanding Irevnas global footprint, have yielded positive results. The demand for knowledge services is expected to remain buoyant, as global players look for ways to grow their revenues and become more efficient. The Irevna-Pipal Research combine is the leader in this market, and has a proven track record of helping clients increase their revenues, provide deeper and faster analysis to the market, and improve returns on investment (ROI). This will help us benefit from the growing demand for our services. operations Irevna continued to lead the global knowledge services industry, adding 22 new clients in 2010, significantly growing all client accounts, and firmly establishing actuarial and risk analytics as growth verticals. Irevnas international research centres in Buenos Aires (Argentina) and Wroclaw (Poland), together with those in Mumbai and Chennai, facilitate round-the-clock servicing of client requirements, bridging talent gaps, and providing multi-lingual capabilities. Irevnas new research centre in China will help enhance these capabilities, particularly in the Mandarin language, and extend the reach of its services further. B.2. INDIA ReSeARCH Highlights Released 65 CRISIL Independent Equity Research (IER) reports during 2010, providing investors with high-quality research on listed Indian companies. Received a mandate from the National Stock Exchange to provide company reports on entities listed on the exchange Received a prestigious mandate from Employees Provident Fund Organisation (EPFO) to assist in selecting, and monitoring the performance of fund managers Launched the new, enhanced website, www.crisilresearch.com, to deliver near-real-time industry research to customers Business environment The favourable domestic economic environment and increasing investments in 2010 revived demand for crisiL researchs offerings. A number of companies that were raising funds approached crisiL Research for valuation reports and sector studies to aid in their decision-making. Opportunities in the wealth management space also increased because of a shift in the industrys business model, from products to value-based advice.
23
statutory reports
operations CRISIL Research continued to build on its powerful value proposition of providing macro and micro integrated research. It also intensified efforts to reach out to the corporate sector with industry studies and customised research offerings. The revamped website www.crisilresearch.com gives customers near-real-time access to research. the website enables clients to track and forecast the performance of 50 industries, using crisiL research data and analysis, and the clients own assumptions about key variables. Market participants, including listed companies, drove strong demand for CRISILs Independent Equity Research (IER): On a cumulative basis 81 reports have been published, including 20 sponsored by the National Stock Exchange Investor Protection Fund Trust (NSE IPFT). CRISIL also received a mandate from NSE IPFT to provide company reports on the entities listed on the exchange. Investors can access the equity research and company reports sponsored by NSE IPFT at www.crisil.com and www.nseindia.com. CRISIL FundServices has been re-appointed by EPFO, to assist in selecting fund managers and monitoring their performance, for a three-year period. CRISIL FundServices also worked closely with the Indian mutual fund industry to help it transition to revised valuation norms for money market instruments.
C. ADVISoRY
CRISIL carries out its infrastructure advisory and risk solutions businesses through its subsidiary, crisiL risk and infrastructure solutions Limited (cris). C.1. CRISIL INFRAStRUCtURe ADVISoRY BUSINeSS Highlights Assisted the Ministry of Rural Development, Government of India (GoI), in a unique and innovative public-private-partnership project to provide urban services in rural areas (PURA); the pilot project promises to be the first of many such endeavours Helped the Ministry of Non-Conventional Energy, GoI, design the framework for exchange of renewable energy purchase obligations, and a platform for trading in renewable energy certificates Received a renewed mandate from the World Bank to conduct training programmes in enhancing the regulatory reform capabilities of member regulators of the East Asia Pacific Infrastructure regulators forum (eAPirf) Business environment Activity levels in the urban and energy sectorthe two key areas for CRISs advisory business showed contrasting trends in 2010. The energy sector saw significant investments in conventional energy projects by the public and private sectors, strong policy and regulatory initiatives in the renewable energy sector, and downstream activity to deploy natural gas available in the country. The urban sector, however, witnessed a slowdown in investments and activity in 2010, particularly in the second half, as the first phase of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) reached maturity. The outlook for 2011 suggests continued activity in the energy sector, and a revival of deferred projects in the urban sector. State governments are also expected to undertake infrastructure development projects. operations Revenues in the infrastructure advisory business were constrained by the slowdown in urban sector projects investments, although an investment revival in the energy sector mitigated the impact of the
24
slowdown. To broad-base revenue, CRISs advisory business has set up a team to exclusively pursue opportunities in the transport and logistics sector. the business will also focus on growing its presence in the mineral and social infrastructure sectors. The strong domain expertise that CRIS brings to the table is likely to help it benefit from the renewed developer and private equity interest in conventional energy projects. CRISs growing credentials in renewable energy, transportation and logistics, and oil, gas, and minerals will add to our range of operations in the private sector. criss international operations remain strongly focused on Africa, backed by a slew of assignments in Namibia, Mozambique and South Africa. The World Banks renewal of the mandate to CRIS to assist the East Asia Pacific Infrastructure Regulators Forum (EAPIRF) to enhance the regulatory reform capabilities of member regulators, is a strong testimonial to criss credentials as an enabler of regulatory efficiency. CRIS made significant progress in 2010 in streamlining operations with respect to staffing, and improving the quality of its deliverables and collection processes. CRIS expects to carry this momentum forward into 2011, and benefit from improvements in knowledge management to better harness our capabilities and experience. C.2. CRISIL RISK SoLUtIoNS (CRS) Highlights Won key accounts in the public and private banking sector - portfolio of customers now includes 9 of indias top 10 banks entered the global arena, winning two prestigious mandates including a reputed multilateral development institution in South East Asia Developed a loan origination system to enable automation of a banks credit appraisal process as an important module in its internal rating platform Business environment Over the past five years, most banks have invested considerable resources in their processes, especially those pertaining to credit risk, as part of their initiative to comply with Basel II. Most banks and financial institutions have now developed strong practices with regard to credit risk, and the Standardised Approaches of Basel II, and have, therefore, begun to shift their focus to strengthening other processes, such as those that relate to Advanced Approaches. CRS believes that banks and financial institutions will, over the medium term, continue to invest in systems and processes, and move from a compliance-based approach in risk management to a bestpractices-based approach. CRSs services are, therefore, likely to be in increasing demand. operations crs remained focused on both consulting and software solutions, and concluded multiple assignments in both. CRS added vital enhancements to all its products such as Risk Assessment Model (RAM), Capital Assessment Model (CAM), CRISIL Operational Risk Evaluator (CORE) and Credit Capital (CC). CRS aims to expand its product coverage and increase its product usability. Various enhancements have helped strengthen the product positioning as a comprehensive end-to-end solution encompassing both risk measurement as well as associated process management.
25
statutory reports
Intensified business development initiatives in countries such as Mauritius, Sri Lanka and Bangladesh, have also begun to yield results. The business successfully renewed its ISO9001:2008 certification.
D. CoLLABoRAtIoN WItH S&p

The various business verticals of CRISIL and S&P collaborated extensively. Key initiatives included a joint seminar by CRISIL Ratings and S&P on The New Normal: The changing face of Financial Markets. More than 100 invitees, including media and investors, attended the event. CRISIL and S&P jointly released the Standard & Poors Indices Vs Active (SPIVA) report for Indias mutual funds industry. this report, a bi-annual publication, compares the performance of indices and active funds. CRISIL Infrastructure Advisory collaborated with S&P to co-sponsor the World Bank-Singaporeinfrastructure finance summit. this summit was organised by the world Bank, the singapore Ministry of finance and the Monetary Authority of singapore in association with the financial times and the world Bank-AseAn infrastructure finance network. Additionally, CRISIL Risk Solutions worked closely with S&P to market its products and services in several geographies, including the Middle East and Asia Pacific. As part of the collaborative efforts, C-CER published 11 reports/articles on Asia-Pacific economies for S&P.
e. CRISIL CeNtRe FoR eCoNoMIC ReSeARCH (C-CeR)

CCER continued to focus on research on macro economics in India and the Asia Pacific, consistently building crisiLs franchise in the indian media and positioning the company as the foremost analyticsbased voice on the economy in the region. C-CER published two special reports during the yearSkilling India: The Billion People Challenge, and India: Raising the Growth Bar. It also introduced two new productsCRISIL EcoMonitor and South Asia economic outlook. c-cer continues to work with the egyptian institute of Directors (eioD), and Hawakmah, the Institute for Corporate Governance (a subsidiary of the Dubai International Financial Centre) for creation of an Environmental, Social & Governance (ESG) Index in their respective regions.
F. HUMAN ReSoURCeS
crisiLs Human resources team continued to focus on attracting, retaining, and growing talent. in 2010, 1083 employees were hired, up from 579 hired in 2009. the total headcount in crisiL increased to 2805 as on December 31, 2010 from 2164 a year previously. Highlights of CRISILs talent Attraction Initiatives strengthened the senior management team Maintained strong presence on campuses42 business schools were visited during the year and job offers were extended to 186 students Increased the number of seats on offer at the CRISIL Certified Analyst Programme (CCAP), which entered its fourth year, with 47 interns from the programme joining during the year. Inducted all 17 interns from the first batch of the Irevna Certified Analyst Programme (ICAP)
26
Retaining talent CRISIL followed a structured approach towards people development, by understanding the functional and behavioural competencies required for each role, and then devising a comprehensive training plan to address gaps in skill sets. More than 1100 training sessions were conducted organisation-wide, during the year, aggregating 77,752 man-hours of training. These trainings ranged from technical subjects to functional and behavioural skill-building programmes. to increase employee engagement, the rewards and recognition programme, crisiL AwArDs Celebrating Winning Performances was revamped, expanding the scope of the awards, increasing the transparency of the process, and providing greater visibility to award winners. CRISILs brand-building and thought leadership initiative, the CRISIL Young Thought Leader (CYTL) competition, received 153 responses from students of 62 business colleges and graduate schools. During the year, 93 employees received remuneration of Rs. 2.4 million or more per annum. In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors Report. In terms of the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to the shareholders without this annexure. Shareholders interested in obtaining a copy of the annexure may write to the Company Secretary at CRISILs registered office.
G. SUBSIDIARIeS
CRISIL has been granted an exemption by the Ministry of Corporate Affairs from attaching individual annual reports of its subsidiary companies to its annual report. A statement containing brief financial details of these companies is included in the annual report. the annual accounts of the subsidiary companies and the related information will be made available to shareholders who seek such information.
H. ACQUISItIoN oF pIpAL ReSeARCH

CRISIL signed agreements on September 22, 2010 for the acquisition of the assets of Pipal Research corporation (Prc) including 100% of the share capital of Pipal research Analytics and information Services India Private Limited. After completion of all conditions precedent, the transaction was completed with effect from December 3, 2010.
I.
JoINt VeNtURe - INDIA INDeX SeRVICeS AND pRoDUCtS LIMIteD

India Index Services and Products Limited (IISL), CRISILs 49:51 joint venture with National Stock Exchange of India Limited (NSE), provides a variety of indices and index-related services and products to the capital markets. IISL has a licensing and marketing agreement with S&P, the worlds leading provider of investible equity indices. IISL issued licenses to various clients such as Insurance Companies, Asset Management Companies, etc. within India for facilitating the launch of Index Funds, Exchange Traded Funds and issuance of debentures that carry returns linked to the S&P CNX Nifty Index. IISL also concluded licensing agreements for issuance of structured products linked to the S&P CNX Nifty Index outside India.
27
statutory reports
J. DIReCtoRS
In accordance with the articles of association of the Company and the provisions of the Companies Act, 1957, Mr. BV Bhargava and Dr. Nachiket Mor retire by rotation and being eligible, offer themselves for reappointment.
K. AUDItoRS
The Statutory Auditors, M/s. SR Batliboi & Co, Chartered Accountants, hold office up to the ensuing Annual General Meeting and the Board recommends their reappointment.
L. MANAGeMeNt DISCUSSIoN AND ANALYSIS RepoRt

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual report.
M. CoRpoRAte GoVeRNANCe
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual report. The certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under Clause 49, is attached to this report.
N. otHeRS
N.1 pARtICULARS ReGARDING CoNSeRVAtIoN oF eNeRGY, teCHNoLoGY ABSoRptIoN AND FoReIGN eXCHANGe eARNINGS AND eXpeNDItURe The particulars regarding foreign exchange earnings and expenditure appear at Item No. 8 and 9 in the notes to the Accounts. since the company does not own any manufacturing facility, the other particulars relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the report of the Board of Directors) rules, 1988 are not applicable. N.2. DIReCtoRS ReSpoNSIBILItY StAteMeNt AS ReQUIReD UNDeR tHe pRoVISIoNS CoNtAINeD IN SeCtIoN 217(2AA) oF tHe CoMpANIeS ACt, 1956 Your Directors hereby confirm that: (i) In the preparation of the annual accounts, the applicable accounting standards have been followed. judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for that period. (iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) The Directors have prepared the annual accounts on a going concern basis.
(ii) The Directors have selected such accounting policies and applied them consistently and made
28
employees Stock option Scheme The shareholders of the Company by postal ballot on February 4, 2011 approved the Employees Stock option scheme for employees and whole-time Directors of crisiL and its subsidiaries. Acknowledgements The Board of Directors wishes to thank the employees of CRISIL for their exemplary dedication and the excellence they have displayed in conducting the operations of CRISIL. The Board also wishes to place on record its sincere appreciation of the faith reposed in the professional integrity of crisiL by customers and investors who have patronised its services. The Board acknowledges the splendid support provided by market intermediaries. The affiliation with Standard and Poors has been a source of great strength. the Board of Directors also wishes to place on record its gratitude for the faith reposed in CRISIL by the Securities and Exchange Board of India, the Reserve Bank of India, the Government of India, and the state governments. The role played by the media in highlighting the good work done by crisiL is deeply appreciated.
on behalf of the Board of Directors,
Mumbai, february 14, 2011
Deven Sharma chairman
29
statutory reports
Board of Directors Directors report Management Discussion and Analysis
MAnAGeMent DiscUssion AnD AnALYsis RepoRt

BUsiness AnD inDUstrY oVerView
CRISIL is a globally diversified analytical company providing ratings, research and risk and policy advisory services. We are Indias leading ratings agency. We are also the foremost provider of high-end research to the worlds largest banks and leading corporations. CRISILs majority shareholder, Standard and Poors, is the worlds foremost provider of independent credit ratings. Standard & Poors is a part of The Mc Graw-Hill companies. The business environment remained steady for Ratings during 2010. Growth for CRISILs Ratings business was driven by overall improvement in investor sentiment, leading to improvement in the bond and commercial paper market. the Bank Loan ratings (BLr) and small and Medium enterprise ratings (sMe) segments maintained consistent growth. increasing interest rates towards the end of the year could impact fresh bond and commercial paper issuance in the near term, while momentum in BLR and SME ratings is expected to continue. The Global Analytical Centre (GAC) operations are expected to maintain growth momentum, in line with recovery in the global credit markets. CRISILs Global Research and Analytics business performed well in 2010, with business volumes growing considerably. Irevna continued to maintain leadership in equity, fixed income, derivative, quantitative and actuarial services. During 2010 Irevnas research centers based in Poland and Argentina saw good growth, with several new roles being added. Irevnas investment in new products and the new international research centre in China will support the divisions growth in the future. CRISILs India research business benefited from an improvement in the domestic business environment. CRISILs Infrastructure Advisory business has two main segmentsenergy and urban development. While the energy segment benefited from investments and policy initiatives, the urban development segment witnessed a slowdown in the second half of 2010. The outlook for 2011 continues to be positive for the energy sector; improvement is also expected in the urban development segment as the government initiates steps to arrest the slowdown in this segment. The outlook for CRISIL Risk Solutions (CRS) is positive as banks and financial institutions continue to invest in Risk Management Systems. CRS is also looking at expanding its business, particularly in the ASEAN market.
Annexure to the Directors Report
AnALYsis of finAnciAL conDition AnD resULts of oPerAtions

The accompanying financial statements have been prepared in accordance with the requirements of the Companies Act, 1956, and Generally Accepted Accounting Principles and accounting standards prevailing in India. CRISILs management accepts responsibility for the integrity and objectivity of these financial statements, and for the estimates and judgments used therein.
30
A.
Financial Condition 1) Fixed Assets At the end of the year, the companys investments in fixed assets were as follows: Details Gross Block Less : Accumulated Depreciation Net Block Add : Capital Work in Progress Net Fixed Assets Depreciation as a % of total income Accumulated Depreciation as % of Gross Block During the year, the companys investment in fixed assets and capital work in progress was Rs. 930.92 lakh, whereas sale of assets realised Rs.3,189.67 lakh. The assets acquired included equipment, computers, and leasehold improvements to support expansion of business and to provide for replacement of existing assets. The assets sold were mainly office properties, computers and furniture. Depreciation as a percentage of total income remained constant at 3% and accumulated depreciation as a percentage of the gross block was 44% as against 55% in the previous year. The company expects to fund its investments in fixed assets and infrastructure from its internal accruals and liquid assets. It may, however, borrow to fund capital expenditure, if considered necessary. 2) Investments and treasury the companys treasury as on December 31, 2010, was rs.13,119.02 lakh, as against Rs. 23, 415.88 lakh in the previous year. The details of the investments are as under: category cash and Bank Balance Fixed Deposit Money Market Mutual funds Fixed Maturity Plans totAL 2010 (rupees Lakh) 3,359.75 8,759.27 1,000.00 13,119.02 % 26% 67% 0% 7% 100% 2009 (rupees Lakh) 7,235.83 6,180.44 9999.61 23,415.88 31% 26% 43% 0% 100% % Dec. 31, 2010 (rupees Lakh) 17738.69 7753.99 9,984.70 8.3 9,993.00 3% 44% Dec. 31, 2009 (rupees Lakh) 10,990.08 6,045.55 4,944.53 6,366.83 11,311.36 3% 55% 61% 28% 102% -100% -12% Growth ( %)
The Companys treasury position as of December 31, 2010, is lower than that of the previous year, mainly on account of payouts for a one-time special dividend, the buyback programme and the Pipal acquisition. Cash and cash equivalents constituted 34% of total assets as on December 31, 2010, as against 57% in the previous year. 3) Current Assets, Loans and Advances sundry debtors were rs. 10,024.50 lakh as on December 31, 2010, as against rs. 7,328.64 lakh as on December 31, 2009. The debtors constituted 19% of the total operating revenue, (representing an outstanding of 69 days of operating revenue) as against 17% (representing an outstanding of 61 days of operating revenue) during the previous year. The increase in debtors outstanding has been mainly on account of an increase in receivables in the research business.
31
statutory reports
The break-up of debtors relating to segments is given below: As on Dec 31,2010 segment Rating Services Research Services totAL (rupees Lakh) 3,601.10 6,423.41 10,024.50 % 36% 64% 100% As on Dec 31,2009 (rupees Lakh) 3,491.70 3,836.94 7,328.64 % 48% 52% 100% %change 3% 67% 37%
The company believes that the outstanding debtors are recoverable. The company has adequate provision for bad debts. Loans and advances comprise loans to staff, advances recoverable in cash or kind, sundry deposits, and loan to subsidiary. Advances recoverable in cash or kind or for value to be received are mainly towards amounts paid in advance for value and services to be received in future. Sundry deposits represent deposits for premises taken on lease, telephone, electricity and others. 4) Current Liabilities & provisions: Sundry creditors include amounts payable to vendors for supply of goods and services, provision for bonus payable to staff and commissions payable to directors. Advances received from clients include fees received for which services have not yet been rendered, and unearned revenue at year-end, which pertains to services to be rendered in the next financial year, for which the related costs were not yet incurred. Provision for leave encashment and gratuity represents the companys liability for leave encashment and gratuity, valued on an actuarial basis as per Accounting Standards 15 notified by Companies Accounting Standards Rules, 2006.The valuation is made as per the Projected Unit Credit Method, taking into account qualifying salary projected upto the assumed date of cessation of employment for whatever reason. The proposed dividend represents the dividend recommended to the shareholders by the Board of Directors, which will be paid after the Annual General Meeting upon approval by the shareholders. B. Results of operations the summary of the operating performance for the year is given below. (rupees Lakhs) results of operations Particulars income from operations other income total income Expenses Personnel Expenses Establishment Expenses Other Expenses Depreciation Operating Expenses Profit before Tax Provision for Taxation Profit after Tax & before prior period items Prior period expense, net of tax Profit after Tax 12 Months ended Dec-10 % 52,871.21 88% 7,362.23 12% 60,233.44 100% 19,890.45 6,123.91 7,026.42 2,020.85 35,061.63 25,171.81 5,321.90 19,849.91 274.45 19,575.46 33% 10% 12% 3% 58% 42% 9% 33% 0% 32% 12 Months ended Dec-09 % 44,162.34 95% 2,283.02 5% 46,445.36 100% 15,953.90 4,741.51 5,327.86 1,387.93 27,411.20 19,034.16 4,000.44 15,033.72 15,033.72 34% 10% 11% 3% 59% 41% 9% 32% 0% 32% Growth % 20% 222% 30% 25% 29% 32% 46% 28% 32% 33% 32% 0% 32%
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During the year, total income grew by 30% and operating expenses by 28% over the previous year. the growth in operating income was on account of growth in both the rating and research segments, while the increase in operating expenses was mainly on account of depreciation and costs of moving to the new office premises. Other income growth was mainly on account of one time sale of investment and property. The net profit after tax, excluding prior period items, grew by 31 %, despite a challenging business environment. operating Revenue (rupees Lakh) 12 Months ended segment Rating Services Research Services income from operations Dec-10 28,408.77 24,462.44 52,871.21 % 54% 46% 100% 12 Months ended Dec-09 23,890.16 20,272.18 44,162.34 % 54% 46% 100% Growth % 19% 21% 20%
During the year, rating income grew by 19%, mainly driven by growth in BLR and SME ratings, whereas research income recorded a growth of 21% mainly on account of strong growth in Irevna and CRISIL research. The composition and growth of expenses during the year was as follows: (rupees Lakh) 12 Months ended Particulars Personnel Expenses Establishment Expenses Other Expenses Depreciation Total Expenses income from operations Dec- 10 19,890.45 6,123.91 7,026.42 2,020.85 35,061.63 52,871.21 % 38% 12% 13% 4% 66% 100% 12 Months ended Dec-09 15,953.90 4,741.51 5,327.86 1,387.93 27,411.20 44,162.34 % 36% 11% 12% 3% 62% 100% Growth % 25% 29% 32% 46% 28% 24%
During the year, personnel expenses increased by 25% due to increase in salaries and addition of 442 employees. Establishment expenses were higher due to operationalisation of new offices during the year. The revenue and profit per employee were Rs. 24.93 lakhs (+2.5 %) and Rs 9.25 Lakhs (+11.8 %) respectively. The company will continue with its initiatives to improve its revenue and profit per employee through business process re-engineering and effective use of technology. The company constantly strives to make its salary structure competitive in the market to attract and retain talent. Revenues and profits per employee for the past five years have been as under: Year ended Average number of Employees 2,121 Operating Revenue per employee (rupees Lakh) Net Profit per Employee (Rupees Lakh) Interest the company continued to be debt-free during the year and therefore, did not incur any interest expense. 24.93 9.25 24.31 8.28 23.25 8.44 21.87 6.05 21.73 5.50 1,817 1,627 1,168 680 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06
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C.
Risk Management CRISIL manages risks in its business operations as follows: 1) Business Risks To mitigate the risk of high dependence on any one business for revenues, the company has adopted a strategy of launching new products/services, globalizing its operations, and diversifying into different business segments. the strategy has yielded good results and the company therefore, now has a well diversified stream of revenues. To address the risk of dependence on a few large clients and a few sectors in the business segments, the company has also actively sought to diversify its client base and industry segments. The company strives to add value to its clients by providing services of a superior quality, and maintaining a robust franchise with investors and end-users, to mitigate the risk arising from price competition. Repeat business from large clients, nevertheless, continues to contribute significantly to the companys revenues. During the year, we launched a new product, CRISIL Real Estate Star Rating (CREST) and added multiple service offerings in Irevna. CRISIL Ratings Centre of Excellence, and the product quality assurance wings assist in designing and refining methodologies, and facilitate knowledge accumulation and dissemination. This is aimed at improving the predictive capability of CRISILs ratings, opinions and advice to guard its credibility in the market place. competition in the talent market challenges the companys ability to retain employees. to address this risk, the company continues to provide its staff with regular training and challenging job opportunities within the group, and to make its salary structure merit-based and competitive in the market to attract and retain talent. the risk of disruption to its business operations is also minimized through automation of processes, business process re-engineering and effective use of technology. With increased proportion of revenues now being in foreign currencies, the risk of variation in the currency rates for exported services is now on the increase. In 2010, the company initiated a hedge programme to mitigate foreign exchange risk. The hedge programme covers a significant portion of projected future revenues over a 12 month period and is restricted to plainvanilla forward contracts. Appropriate internal controls are in place for the hedging programme. 2) Financial Risks crisiL has been a debt-free company since its date of incorporation. the company has followed the strategy of funding all its expansion, diversification and infrastructure-related expenditure through internal accruals. 3) Legal & Statutory Risks the company has no material litigation in relation to contractual obligations pending against it in any court in India or abroad. The company secretary functions as a compliance officer to advice the company on issues relating to compliance with law, and to preempt violations of the same. The compliance officer reports at every board meeting on the companys initiatives to comply with the laws of various jurisdictions. The company also seeks independent legal advice wherever necessary. 4) technology-Related Risks The company uses information technology extensively for its businesses. All technology services are provided through laid-down policies and processes. These processes allow information access to personnel within the company based on identified roles. A systems audit is conducted regularly to ensure that the policies and processes are satisfactory, and in line with internationally-accepted best practices. the companys business processes are automated through customised business
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applications that capture and maintain information regarding business processes, thus protecting its knowledge base. the company also possesses intellectual property rights for customised business applications. The technology used by the company at all locations provides for redundancy, and for disaster recovery. For critical business processes, the business teams have defined a business continuity plan and have tested it with the help of the IT team. The technology department keeps continuously abreast of technology changes, and suitably undertakes projects for technology upgradation to keep the technology infrastructure current, and to provide for redundancy 5) Audit and Internal Controls CRISIL has well-established processes and clearly-defined roles and responsibilities for people at various levels. This, coupled with adequate internal information systems embedded in business automation software, ensures proper information flow for the decision-making process. Adherence to these processes is ensured through frequent internal audits. The Executive Committee monitors business operations through regular reviews of performance vis--vis budgets. An extensive programme of internal audit conducted by an independent firm, reviews by the Audit Committee, and requisite guidelines and procedures augment the internal controls. The internal control system is designed to ensure that financial and other records are reliable for preparing financial statements and other information. these procedures ensure that all transactions are properly reported and classified in the financial records. 6) policy Risks The company derives a significant portion of its revenues from Rating services, which depend on several factors, including regulatory policy. The Reserve Bank of India has mandated the use of ratings from approved rating agencies by Indian banks for calculating their capital requirements under the standardised approach for Basel ii. At present, ratings are mandatory for all public offerings of debentures, except where the conversion or redemption is within 18 months. Ratings are also mandatory for all commercial paper issuances. The present Government policy is directed towards meeting investment requirements through resource mobilisation from the capital markets. However, to mitigate the risk of dependence on mandated businesses, the company continues to pursue its strategy of diversification, and globalising its operations. It also seeks to build a strong franchise with investors by holding investor meets and seminars for improving transparency around ratings and rating methodologies, and showcasing the utility and benefits of ratings. The above discussion contains forward-looking statements, which may be identified by their use of words such as plans, expects, will, anticipates, intends. All such statements address the expectations from, and projections for, the future, including but not limited to statements about the companys strategy for growth, product development, market development, market position, expenditure and financial results. These forward-looking statements are based on assumptions and expectation of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The companys actual results, performance, or achievements may, therefore, differ materially from those projected in these forward-looking statements. The company assumes no responsibility to publicly amend any forward-looking statements, on the basis of any subsequent developments, information or events.
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Auditors Certificate for Corporate Governance Report of the Directors on Corporate Governance
AUDItoRS CeRtIFICAte
for Corporate Governance
to the Members of CRISIL Limited We have examined the compliance of conditions of Corporate Governance by CRISIL Limited for the year ended 31st December, 2010, as stipulated in clause 49 of the Listing Agreement of the said company with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the Management, we certify that the company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For S.R. Batliboi & Co., Firm Registration No.: 301003E chartered Accountants per Shrawan Jalan Partner Mumbai, February 14, 2011 Membership No: 102102
36
CHIeF eXeCUtIVe oFFICeRS DeCLARAtIoN

to the Members of CRISIL Limited I hereby confirm that all the members of the Board and Senior Management have affirmed compliance with the code of conduct.
for crisiL Limited Roopa Kudva Date: February 14, 2011 Managing Director & Chief Executive Officer
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corPorAte GoVeRNANCe
CRISIL has been practicing the principles of good corporate governance over the years. The Company has adopted best practices for corporate governance, and disclosure standards, and enhanced shareholder value while protecting the interests of other stakeholders, clients, suppliers and its employees. The Directors present below the Companys policies and practices on corporate governance.
report of the Directors on
BOARD OF DIRECTORS:
Size and Composition of the Board: the Board of Directors has eight members. the Board comprises of four independent Directors. As per the Articles of Association of the Company, the Board can have up to 15 members. The Company has one alternate Director. The Chairman is a non-executive Director. Mr. B. V. Bhargava, Mr. H.N. Sinor, Ms. Rama Bijapurkar and Dr. Nachiket Mor are the Independent Directors on the Board of the Company. Membership term: As per the Articles of Association of the company, at least two-thirds of the Board of Directors should be retiring Directors. One-third of these Directors are required to retire every year and if eligible, the retiring Directors qualify for re-appointment. The Board has adopted the following guidelines regarding the appointment and tenure of a non-whole time Director on the Board :1. 2. no Director should hold directorships in more than ten indian public limited companies. Every Director is expected to attend at least 60% of the Board meetings held in a year. While reappointing Directors on the Board and committees of the Board, the contribution and attendance record of the concerned Director should be considered. 3. 4. the change of Directors on the Board of crisiL, if carried, would be so accomplished that at no point of time, the average term of the members on the Board is reduced unreasonably. Whole-time Directors are appointed by the shareholders for a maximum period of five years but can be re-appointed on completion of their term, if eligible. Criteria for Board Membership: The members of the Board of Directors of the Company are eminent persons of proven competence and integrity. The Board comprises individuals with personal characteristics and core competencies such as the recognition of the importance of the Boards tasks, integrity, sense of accountability and track record of achievements. Besides having financial literacy, experience, leadership qualities and the ability to think strategically, the Directors have a significant degree of commitment to the Company and devote adequate time for the meetings, preparation and attendance. Board members possess the education, expertise, skills and experience in various sectors and industries required to manage and guide the Company. None of the Directors is a relative of a Whole-time Director or of an independent Director and is expected not to serve any independent or executive position in any company that is a direct competitor. None of the nonwhole-time Directors of the Company have any pecuniary relationships or transactions with the Company except payment for legal services provided by Singhania & Partners (Firm) in which Mr. Ravinder Singhania is a partner. Whole-time Directors are excluded from serving on the Board of any other entity unless the said entity has interests that are germane to the business of the company.
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Succession policy: The Board constantly evaluates the contribution of its members and recommends to shareholders their reappointment periodically as per the statute. whole-time Directors are appointed by the shareholders for a maximum period of five years at one time, but are eligible for re-appointment upon completion of their term. Non-whole-time Directors do not have any term but retire by rotation as per the law. The Board has adopted a retirement policy for its members. The maximum age of retirement of Whole-time Directors is 58 years, which is the age of superannuation for the employees of the company. Memberships of other boards: Independent Directors are not expected to serve on the boards of competing companies. No Director of the Company is a member of more than ten committees or act as chairman of more than five committees across all Indian public limited companies in which he/she is a Director. Furthermore, every Director informs the Company about the committee positions he/she occupies in other companies and notifies the changes as and when they take place. the details of other directorships held by the companys Directors in public limited companies are given below: name of the Director Memberships on other Boards BV Bhargava Excel Crop Care Limited Grasim industries Limited icici Lombard General insurance company Limited J.K. Lakshmi Cement Limited supreme industries Limited L&T Infrastructure Finance company Limited Grasim Bhiwani Textiles Limited Lakshmi Precision screws Limited L&T Finance Holdings Limited Maxx Mobile Communications Limited Hn sinor 3i infotech Limited icici Venture funds Management company Limited icici Lombard General insurance company Limited Tata Investment Corporation Limited tata capital Limited tata Motors finance Limited themis Medicare Limited sahara india financial corporation Limited Zoroastrian Co-operative Bank Limited Member, Audit committee Member, Audit committee Member, Audit committee chairman, Audit committee Member, Audit committee Member, Audit committee chairman, Audit committee Member, Audit committee Member, Investor Grievance Committee chairman, Audit committee committee Memberships* chairman, Audit committee chairman, Audit committee -
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name of the Director Memberships on other Boards Rama Bijapurkar crisiL risk and infrastructure solutions Limited Axis Bank Limited Mahindra Holidays & Resorts India Limited Mahindra and Mahindra financial Services Limited icici Prudential Life insurance company Limited nachiket Mor Deven Sharma thomas schiller David Pearce crisiL risk and infrastructure solutions Limited crisiL risk and infrastructure solutions Limited Ravinder Singhania crisiL risk and infrastructure (Alternate Director) solutions Limited Unitech Limited Assets care enterprise Limited Roopa Kudva India Index Services & Products Limited CRISIL Credit Information Services Limited Irevna LLC, US Irevna Limited, UK CRISIL Irevna Poland Sp. Z.o.o CRISIL Irevna Information technology (Hangzhou) co. Ltd
committee Memberships* Member, Audit committee Member, Audit committee -
* Memberships/Chairmanships in Audit Committee and Shareholders/Investors Grievance Committee is considered. Details of Shareholdings of Directors as on December 31, 2010 name of the Director BV Bhargava Hn sinor Rama Bijapurkar nachiket Mor Deven Sharma thomas schiller David Pearce Ravinder Singhania, Alternate Director Roopa Kudva, MD & CEO no. of shares held 16,000
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Responsibilities: The Board looks at strategic planning and policy formulation. The Board meets at least once in every quarter to review the Companys operations and the maximum time gap between any two meetings is not more than four months. During the year ended December 31, 2010, the Board met six timeson February 18, April 16, July 22, September 9, October 18, and December 20. Most Board meetings were well-attended as shown below. The agenda of board meetings is sent to all the Directors well in advance and contains all the relevant information. The Company has an executive committee comprising the Managing Director and a team of senior management personnel with proper demarcation of responsibilities and authority. the Managing Director is responsible for corporate strategy, planning, external contacts and Board matters. The senior management personnel heading respective divisions are responsible for all day-to-day operationsrelated issues, profitability, productivity, recruitment and employee retention for their divisions. Mr. Raman Uberoi heads the domestic ratings business, Mr. GV Mani heads the global research and analytics business, Mr. Mukesh Agarwal heads the research business, and Mr. Arun Panicker oversees operations. Mr. M Ramsekhar has recently joined as CEO for CRISIL Risk & Infrastructure Solutions Ltd. (CRIS) and heads the infrastructure advisory and risk solutions business, which is conducted by a wholly owned subsidiary. name of the Directors no. of Board meetings held BV Bhargava Hn sinor Rama Bijapurkar nachiket Mor Deven Sharma thomas schiller David Pearce Roopa Kudva 6 6 6 6 6 6 6 6 no. of Board meetings attended 6 5 5 4 3# 5 4 6 Last Annual General Meeting attendance Yes Yes Yes Yes Yes Yes Yes Yes
# In addition to the three Board meetings attended in person, Mr. Deven Sharma had attended the other three board meetings through tele-conference. There were no personal transactions by the directors involving a conflict of interest with the Company. the company has a code of ethics and Personal trading Policy for Directors and employees. the code of Ethics contains policies on confidentiality, gifts and favours, and false and misleading information or disclosures. the Personal trading Policy contains regulations, policies, procedures and restrictions relating to personal investments by the Directors and employees. The policy also prohibits trading in securities of any foreign or Indian listed company on the basis of unpublished price-sensitive information. Remuneration policy: 1) Remuneration to non-whole-time directors: non-whole-time directors are paid sitting fees for each meeting of the Board or its committee attended by them and are also eligible for commissions. the commission payable to each non-whole-time Directors is limited to a fixed sum per year as determined by the Board, and is revised from time to time, depending on individual contribution, the Companys performance, and the prevailing norms. The members of the company at the meeting held on April 27, 2007 had authorised payment of commission to the non-whole-time directors up to 3 per cent of the net profits of the Company determined in
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statutory reports
accordance with the provisions of Sections 198, 349 and 350 of the Companies Act, 1956, subject to the approval of the Central Government. The Company has received the approval of the Central Government to pay remuneration not exceeding 3 per cent of the net profits to the non-whole-time directors for a period of five years with effect from January 01, 2008. 2) Whole-time Directors and other employees of the Company: the remuneration and reward structure for whole-time Directors and employees comprises two broad componentsshort-term remuneration and long-term rewards. The Compensation Committee, comprising two independent directors, determines the remuneration of whole-time Directors and determines guidelines for remuneration payable to the employees. These guidelines are as under: a) Annual remuneration: Annual remuneration refers to the annual compensation payable to whole-time Directors and employees of the Company. This comprises two partsa fixed component, and a performancelinked variable component based on the extent of achievement of the individuals objectives. Every employee signs a performance contract, which clearly articulates the key performance measures for that particular defined role. The performance-linked variable pay is directly linked to the performance on individual components of the performance contract. An employees variable pay is, therefore, directly dependent on key performance measures that represent the best interests of shareholders. The total remuneration is set at levels to attract, motivate, and retain high-calibre, and high potential personnel in a competitive global market. The total remuneration level is reset annually based on a comparison with the relevant peer group in the Indian market, established through an independent compensation survey. In addition to the above, incentives linked to the performance of the business unit are payable if the business unit performs better than expected. The remuneration levels and the performance contracts are finalised under the overall supervision, guidance, and approval of the compensation committee. b) Long-Term Rewards: Long-term rewards primarily comprise a long-term incentive plan, under which incentives are granted to eligible key employees based on their contribution to the profitability of the Company, relative position in the organisation, and length of service. The plan is supervised by the compensation committee. non-whole-time directors are not eligible for participation in the plan. sitting fees and commission paid to non-whole-time Directors (in rupees) name of Directors BV Bhargava Hn sinor Rama Bijapurkar nachiket Mor Deven Sharma thomas schiller David Pearce Ravinder Singhania (Alternate Director) totAL 10,20,000 12,283,380 13,303,380 sitting fees 320,000 160,000 120,000 60,000 180,000 180,000 commission 2,285,280 2,094,840 2,094,840 2,094,840 1,142,640 1,428,300 1,142,640 total 2,605,280 2,254,840 2,214,840 2,094,840 1,202,640 1,608,300 1,322,640
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remuneration Paid to whole-time Director for the year ended December 31, 2010 (rupees Lakh) name salary Perquisites Variable Pay/Commission Provident Fund & Gratuity Appointment valid till notice period Dividend policy: CRISIL believes in maintaining a fair balance between cash retention and dividend distribution. Cash retention is required to finance acquisitions and future growth, and also as a means to meet any unforeseen contingency. CRISIL has also been conscious of the need to maintain stability in its dividend payout over the years. From 2008, CRISIL has commenced the practice of paying dividend on a quarterly basis. Roopa Kudva 130.02 4.90 106.70 4.68 July 27, 2012 3 months
BoArD coMMittees
the Board has constituted committees consisting of whole-time and non-whole-time Directors to focus on the critical functions of the company. Rating Committee: The Rating Committee comprises of one Non-whole-time Director, Mr. BV Bhargava (Chairman), and one Whole-time director Ms. Roopa Kudva and other senior personnel of the Ratings Division. The Committee takes decisions on new ratings and existing rating reviews, approves new products, criteria and parameters. the committee meets regularly. Audit Committee: The Audit Committee comprises of four non-executive directors who are well-versed with financial matters and corporate laws. Mr. HN Sinor is the Chairman of the Audit Committee. Mr. BV Bhargava, Dr. Nachiket Mor, and Mr. David Pearce are other members of the Audit Committee. The chairman of the Audit Committee remains present at the Annual General Meeting. The external and internal auditors of the Company are invited to attend the Audit Committee meetings to brief members. The Company Secretary is the secretary of the Committee. The Audit Committee met four times in 2010on February 18, April 16, July 22, and october 18. Director Hn sinor BV Bhargava Dr. nachiket Mor David Pearce no. of committee meetings held 4 4 4 4 no. of committee meetings attended 3 4 4 4
the terms of reference for the Audit committee are as follows1. 2. Overseeing the financial reporting process to ensure fairness, sufficiency and credibility of financial statements Recommendation of the appointment and removal of statutory auditors and fixation of their remuneration and approving their payment for any other services rendered by them
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statutory reports
3. 4. 5. 6. 7. 8. 9.
Reviewing of the quarterly and annual financial statements before submission to the Board Reviewing the adequacy of the internal control systems Reviewing the adequacy of the internal audit functions, discussing any significant findings and follow thereon Discussing on the nature and scope of audit with the statutory auditors Reviewing the financial and risk management policies Examination of reasons for substantial defaults, if any, in payment to stakeholders Providing direction to the internal audit functions and monitors the quality of internal and statutory audit
10. Review the functioning of the Whistle Blower mechanism the composition, procedures, role, powers and the terms of reference of the Audit committee are as stipulated in section 292A of the companies Act, 1956 and clause 49 of the listing agreement. Investment Committee: The Investment Committee comprises of three non-executive Directors - Mr. BV Bhargava (Chairman), Mr. Thomas Schiller, Mr. David Pearce, and one executive director, Ms. Roopa Kudva. The Investment Committee lays down policy guidelines and procedures for investing the Companys funds, and reviews this activity at regular intervals. The Investment Committee met once during the yearon October 18, 2010. Director BV Bhargava thomas schiller David Pearce Roopa Kudva Investors Grievance Committee: The Investors Grievance Committee comprises of two non-executive directors, Mr. BV Bhargava (Chairman), Mr. Thomas Schiller, and one executive director, Ms. Roopa Kudva. The Committee periodically reviews the status of investor grievances and redressal of the same. The Committee met four times in 2010on February 18, April 16, July 22, and October 18. Director BV Bhargava thomas schiller Roopa Kudva Compensation Committee: The Compensation Committee comprises of five non-executive directorsMr. BV Bhargava (Chairman), Mr. Deven Sharma, Ms. Rama Bijapurkar, Mr. Thomas Schiller, and Mr. HN Sinor. The chairman of the compensation committee was present at the Annual General Meeting held on April 16, 2010. the committee ensures that a proper system of compensation exists to provide performance-based compensation to all employees of the Company. The Committee considers and approves salary, commission and other emoluments payable to whole-time directors and employees of the company. the annual compensation of whole-time Directors is determined by the compensation committee within the limits set by the shareholders at the general meeting. it also recommends to the Board, the remuneration payable to non-whole-time directors, within the limits laid down by the shareholders at the general meeting and in accordance with other applicable laws. The Committee met once during the yearon February 18, 2010. no. of committee meetings held 4 4 4 no. of committee meetings attended 4 3 4 no. of committee meetings held 1 1 1 1 no. of committee meetings attended 1 1 1
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Director BV Bhargava Rama Bijapurkar thomas schiller Deven Sharma Hn sinor*
no. of committee meetings held 1 1 1 1# -
no. of committee meetings attended 1 1 1 -
* Mr Hn sinor has been appointed member of the compensation committee with effect from December 20, 2010.
#
Mr. Deven Sharma attended the committee meeting by tele-conference.
Allotment Committee: the Allotment committee has been formed to complete the formalities prescribed under the companies Act, 1956, relating to allotment of shares and to authorise officials of the Company to file forms and returns with regulatory authorities. The Allotment Committee comprises of two non-executive directors Dr. Nachiket Mor (Chairman), and Ms. Rama Bijapurkarand one executive Director, Ms. Roopa Kudva. No Allotment committee meeting was held during the year as no shares were allotted during the year.
sHAre HoLDers
Means of Communication: 1. 2. 3. 4. Half-Yearly Newsletter: The Company sends a half-yearly newsletter giving details of the Companys financial performance, including a summary of significant events in the last six months to shareholders. Quarter and annual financial results are published in the leading national and regional newspapers, and displayed on the companys website. News releases, press releases and presentations made to investors and analysts are displayed on the companys website. The annual report is circulated to all members, and is also available on the Companys website.
the Management Discussion and Analysis report form a part of the annual report. In case of appointment or re-appointment of a Director, members are provided a brief resume of the Director, the nature of his/her expertise in specific functional areas, the names of companies in which he/she holds directorship, and membership of committees of the Board. Grievance Redressal: The Board has appointed an Investor Grievance Committee to review and redress complaints received from shareholders. The Committee meets periodically to consider the status of the investor grievances received and redressed along with the ageing schedules of pending complaints. the Board has authorised Mr. Shrikant Dev, Company Secretary, to approve the transfer and transmission of shares. A secretarial audit is conducted by an independent practising company secretary on quarterly basis, to confirm reconciliation of the issued and listed capital, dematerialised capital, and status of the register of members. The Auditors Certificate of Corporate Governance is annexed with the Directors report and will be sent to the stock exchange at the time of filing the annual returns of the Company.
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statutory reports
General Body Meetings: The location, time and venue of the last three Annual General Meetings were as under: nature of Meeting twenty first Annual General Meeting Date and time April 23, 2008 at 3.30 pm Venue Babasaheb Dahanukar Hall, Maharashtra chamber of Commerce, Industry & Agriculture, oricon House, fort. Mumbai 400001. twenty second Annual General Meeting April 28, 2009 at 3.30 pm Rangaswar Hall, 4th floor, Yashwantrao Chavan Pratishthan, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai 400 021. twenty third Annual General Meeting April 16, 2010 at 3.30 pm Rangaswar Hall, 4th floor, Yashwantrao Chavan Pratishthan, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai 400 021. no special resolutions were passed at the last three general body meetings. postal Ballot System: The Central Government has notified the Companies (Passing of Resolution by Postal Ballot) Rules 2001, which lays down the businesses required to be passed by postal ballot. the company has passed the following resolutions by postal ballot for the period from the date of the last Annual General Meeting till the date of this report: sr. no 1. 2. 3. Date of Declaration of Postal Ballot result october 18, 2010 october 18, 2010 february 4, 2011 special resolution under section 31 of the companies Act, 1956 for alteration of Articles of Association special resolution under section 77A of the companies Act, 1956 for the purchase of its own shares Special Resolution for issue and offer of Equity Shares of the company to employees and whole-time Director(s) of the Company under section 81(1A) and other applicable provisions of the companies Act, 1956 and seBi (employee stock option scheme and employee stock Purchase scheme) Guidelines 1999 4. february 4, 2011 Special Resolution for issue and offer of Equity Shares of the company to employees and whole-time Director(s) of the subsidiary companies of the company under section 81(1A) and other applicable provisions of the Companies Act, 1956 and seBi (employee stock option scheme and employee stock Purchase scheme) Guidelines 1999 Description
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Disclosures: During the year, there were no material related-party transactions i.e. transactions of the company of a material nature with its promoters, the Directors or the management, their subsidiaries or relatives etc. that may have a potential conflict with the interests of the company at large. Other related-party transactions are mentioned in the notes to the accounts. there was no non-compliance by the company and no penalties or strictures were imposed on the company by the Stock Exchange or SEBI, or any statutory authority on any matter related to the capital markets during the last three years. The Company has complied with all the mandatory requirements of clause 49 of the Listing Agreement. The Company has also complied with the non-mandatory requirements relating to publication of half-yearly results, having unqualified financial statements, having a whistle-blower policy and also has a mechanism for evaluating non-executive board members. CRISIL Code of Conduct for Directors and Senior Management: the Board of Directors of crisiL has adopted the code of conduct for senior Management; the same is available on the website of the Company. Whistle-Blower policy: The Company has a Whistle-Blower Policy, whereby employees are free to report violations of laws, rules, and regulations, or unethical conduct to the Audit committee. there has been no instance of employees acting under this policy.
47
statutory reports
General Information for Members
GenerAL inforMAtion for MeMBeRS
1.
Annual General Meeting Date and time Venue
: April 15, 2011 at 3.30 p.m. Rangaswar Hall, 4th floor, Yashwantrao Chavan Pratishthan, Gen. Jagannath Bhosale Marg Next to Sachivalaya Gymkhana Mumbai 400021 : friday, April 15, 2011 Wednesday, July 20, 2011 tuesday, october 18, 2011 end of february, 2012 Business standard and sakal www.crisil.com
2.
3. 4. 5. 6.
Calendar for Financial Reporting for the first Quarter ending March 31, 2011 Second Quarter ending June 30, 2011 third Quarter ending september 30, 2011 Year ending December 31, 2011 newspaper where the results are published Site where the financial results, shareholding pattern, annual report etc. are uploaded proposed Final Dividend Dates of Book Closure Dividend payment Date Listing Details
: Rs. 25 per share having nominal value of Rs. 10 each. : wednesday, March 16, 2011 to thursday, March 17, 2011 (both days inclusive) : May 03, 2011 (if dividend payment is approved at the Annual General Meeting). : The shares of the Company are listed on: National Stock exchange of India Limited (NSe) Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (e), Mumbai 400 051. Bombay Stock exchange Limited (BSe) Jeejeebhoy Towers, Dalal Street, fort, Mumbai - 400 001. The Company has paid listing fees at both the exchanges and has complied with the listing requirements. National Stock Exchange of India Limited (NSE) CRISIL Bombay Stock Exchange Limited (BSE) - 500092. ISIN Number: INE007A01017 : Karvy Computershare private Limited Karvy House, 21, Avenue 4, Plot no.17 to 24, near image Hospital Vittalrao nagar, Madhapur. Hyderabad 500 081 Phone no. 040-23420818-828 Fax. No. 040-23420814
7.
Stock Code
8.
Registrars and Share transfer Agents
48
9.
Compliance Officer
10.
Depository System
11.
electronic Clearing Service (eCS)
12.
Bank Details for electronic Shareholding
13.
Furnish Copies of permanent Account Number (pAN)
: Mr. Shrikant Dev, company secretary crisiL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai 400076. Phone: 022-33423000 Fax: 022-33423810 : currently, 99.58% of the companys share capital is held in dematerialised form. for any assistance in converting physical shares in electronic form, investors may approach Karvy Computershare Private Limited or Mr. Shrikant Dev, Compliance Officer, at the addresses given above. The Company has extended the ECS facility to shareholders to enable them to receive dividend through electronic mode in their bank account. the Company encourages members to avail of this facility as ECS provides adequate protection against fraudulent interception and encashment of dividend warrants, apart from eliminating loss/damage of dividend warrants in transit and correspondence with the company on revalidation/issuance of duplicate dividend warrants. : Members are requested to notify their Depository Participant (DP) about the changes in the bank details. Members are requested to furnish complete details of their bank accounts including the Micr codes of their banks to their DPs. : The members are requested to furnish their PAN which will help us to strengthen compliance with KYc norms and provisions of Prevention of Money Laundering Act, 2002. for transfer of shares in physical form, seBi has made it mandatory to the transferee to submit a copy of PAn card to the company . : registrars and share transfer Agents or to Mr. shrikant Dev, Compliance Officer, at the above mentioned address. : investors@crisil.com
14.
Investor Complaints to be addressed to email ID of Grievance Redressal Division
15.
Shareholding pattern as on December 31, 2010 sr. no. 1. Group Holding of the the McGraw-Hill companies a) Standard & Poors International LLC b) S&P India LLC Individuals fiis Mutual Funds/UTI insurance companies Financial Institutions/Banks Bodies corporate Directors nris totAL 600,000 3,120,948 1,248,090 715,265 566,136 474,452 215,011 124,576 16,000 16,366 7,096,844 8.45 43.98 17.59 10.08 7.97 6.69 3.03 1.75 0.23 0.23 100.00 category no. of shares held % Holding
2. 3. 4. 5. 6. 7. 8. 9.
49
statutory reports
General Information for Members
Members holding more than 1% of the paid-up share capital as on December 31, 2010. sr. no 1. Group Holding of the the McGraw-Hill companies a) Standard & Poors International LLC b) S&P India LLC Jhunjhunwala Rakesh & Rekha General insurance corporation of india Unit trust of india state Bank of india Acacia Partners, LP/Acacia Institutional Partners, LP Life insurance corporation of india Franklin Templeton Investment Funds Bright Star Investments Pvt Ltd Variable insurance Products fund iii Mid cap wasatch fund Tata Trustee Co. Pvt. Ltd- A/c Tata Mutual Fund Templeton Mutual Fund A/c-Franklin India totAL 600,000 3,120,948 550,000 303,039 245,820 200,390 171,688 171,413 154,232 94,238 88,255 77,280 74,110 72,122 5,923,535 8.45 43.98 7.75 4.27 3.46 2.82 2.42 2.42 2.17 1.33 1.24 1.09 1.04 1.02 83.47 name of the shareholder no. of shares held % Holding
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
Status report on number of shareholder requests/complaints received and resolved by the Company during the year ended December 31, 2010 nature of correspondence Transfer/Transposition/Transmission Dematerialisation/Remat/ECS/other Request registration of Power of Attorney Issue of duplicate share certificate/correction/process queries Non-receipt of dividend warrant Issue of duplicate drafts in lieu of warrants/revalidation of warrants incorporation of change of address incorporation of bank mandate totAL Received 13 49 5 50 46 10 3 176 Resolved 13 49 5 50 46 10 3 176 Pending -
price movements of the companys shares on National Stock exchange of India Ltd and Bombay Stock exchange Limited for the period from January to December 2010. NSe Month January february March April May June July August september october November December High (rupees) Low (rupees) 5700.00 4450.10 5300.00 4601.00 5784.45 4821.10 6050.00 5228.00 5649.00 5252.00 5880.00 5275.00 6000.00 5610.00 6048.00 5376.00 6265.00 5565.00 6999.00 5931.00 6300.00 5700.00 6880.00 5721.60 Month January february March April May June July August september october November December BSe High (rupees) Low (rupees) 5300.00 4290.30 5271.00 4700.00 5555.50 4873.30 6066.00 5249.70 5600.00 5255.05 5900.00 5300.00 6090.90 5640.00 6100.00 5391.10 6300.00 5571.00 6350.00 5910.00 6343.00 5655.55 6150.00 5704.05
50
CRISIL Ltd. v/s S&p CNX 500, S&p CNX Nifty

6500
6000
Index Value
5500
5000
4500
4000 04-01-2010 13-01-2010 22-01-2010 03-02-2010 11-02-2010 23-02-2010 05-03-2010 16-03-2010 26-03-2010 07-04-2010 19-04-2010 28-04-2010 07-05-2010 18-05-2010 27-05-2010 07-06-2010 16-06-2010 25-06-2010 06-07-2010 15-07-2010 26-07-2010 04-08-2010 13-08-2010 24-08-2010 02-09-2010 14-09-2010 23-09-2010 04-10-2010 13-10-2010 22-10-2010 02-11-2010 11-11-2010 23-11-2010 02-12-2010 13-12-2010 23-12-2010 trading date crisiL Ltd. S&P CNX 500 S&P CNX Nifty
Shareholders Rights: A shareholder in a Company enjoys certain rights, which are as follows: To receive share certificates, on allotment or transfer as the case may be, in due time. To receive copies of the Annual Report, Balance Sheet and Profit and Loss Account and the Auditors report. To participate and vote in General Meetings either personally or through proxies. To receive dividends in due time once approved in General Meetings. To receive corporate benefits like rights, bonus etc. once approved. to apply to the company Law Board to call or direct the Annual General Meeting. To inspect the minute books of the General Meetings and to receive copies thereof. To proceed against the Company by way of civil or criminal proceedings. to apply for the winding-up of the company. To receive the residual proceeds. Other rights are as specified in the Memorandum and Articles of Association available on the website, www.crisil.com. Apart from the above rights, an individual shareholder also enjoys the following rights as a group: to appoint the Directors and Auditors of the company. To requisition an Extraordinary General Meeting. to demand a poll on any resolution. To apply to the Company Law Board to investigate the affairs of the Company. To apply to the Company Law Board for relief in cases of oppression and/or mismanagement. The above-mentioned rights may not necessarily be absolute.
51
At CRISIL, the end of one journey marks the beginning of another in a continuous pursuit of holistic excellence.
standalone financial statements

Auditors report ..................................................................... 53 Balance sheet ....................................................................... 56 Profit and Loss Account ......................................................... 57 cash flow statement ............................................................ 58 schedules forming part of Accounts ....................................... 60 Additional information ............................................................. 84
Revenue
70,147.42
lakh. Dividend
PBt 26,733.23 lakh. PAt 20 70,147.42 Market capitalisation 425,339 lakh. Revenue 70, 147 PAt 20,865.69 lakh. ePs 285.71 Revenue 70,147.42 PBt 26,73 Revenue 70,147.42 lakh. Dividend 2,000 %
net worth 41,558.68 lakh.
2,000 % PAt 20,865.69 lakh.
PAt 20,865.69 lakh.

net worth 41,558.68 lakh.
ePs 285.71 Revenue 70,147.42 PBt 26,733
consolidated financial statements

Auditors report on consolidated statements........................ 85 consolidated Balance sheet .................................................. 86 Consolidated Profit and Loss Account.................................... 87 consolidated cash flow statement ....................................... 88 Schedules annexed to and forming part of the consolidated Accounts ........................................................... 90
PAt 20,865.69 lakh. ePs 285.71 Revenue 70
70,147.42 PBt 26,733

net worth 41,558.68 lakh. Revenue 70,147.42 lakh. Dividend 2,000 %
PAt 20,865.69 lakh.

PAt 20,865.69 lakh.
70,147.42 PBt 26,733

ePs 285.71 Revenue 70,147.42 PBt
26,733
Revenue 70,147.42 lakh. Dividend 2,000 %
52
auditors report
to the Members of CrISIL Limited 1. We have audited the attached Balance sheet of CrisiL Limited (the Company) as at december 31, 2010 and also the Profit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. as required by the Companies (auditors report) order, 2003 (as amended) [the order] issued by the Central Government of india in terms of sub-section (4a) of Section 227 of the Companies Act, 1956, we enclose, in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order. 4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; Place: Mumbai Date: February 14, 2011 For S.R. BATLIBOI & Co. Firm registration number: 301003E Chartered accountants per Shrawan Jalan Partner Membership No.: 102102 c) b) a) v. iv. iii. The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies act, 1956; On the basis of the written representations received from the directors, as on December 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2010 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies act, 1956; vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: in the case of the Balance sheet, of the state of affairs of the Company as at december 31, 2010; in the case of the Profit and Loss Account, of the profit for the year ended on that date; and in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
53

Auditors report Balance Sheet Profit and Loss Account
ANNExuRE REFERRED TO IN PARAgRAPh 3 OF OuR REPORT OF EvEN DATE

Re: CRISIL Limited (i) (a) (b) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. All fixed assets were physically verified by the management in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year.
(c) (ii) (ii) (iii)
the Company is engaged in the business of providing rating and research services and therefore the provisions of clause of paragraph 4 of the said order are not applicable to the Company and hence not commented upon. The Company has not granted/taken any loan to/from parties covered under section 301 of the Companies act, 1956 and therefore the provisions of clause iii (c) to iii (g) are not applicable to the Company and hence not commented upon.
(iv) in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company. The Company is providing rating and research services and do not have inventory. hence adequacy of internal control pertaining to purchase and sale of inventory are not commented upon. (v) According to the information and explanations provided by the management, we are of the opinion that there are no contracts or arrangements referred to in section 301 of the act that need to be entered into the register maintained under section 301. accordingly, the provisions of clause (v) (b) of paragraph 4 of the said order are not applicable to the Company and hence not commented upon.
(vi) the Company has not accepted any deposits from the public. (vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) To the best of our knowledge and as explained, the Central government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies act, 1956 for the products of the Company. (ix) (a) undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income-tax, sales-tax, wealth-tax, service tax and cess and other material statutory dues have been regularly deposited with the appropriate authorities. Further, since the Central government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. The provisions relating to custom duty and excise duty are not applicable to the Company. according to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b)
54
(c)
According to the records of the Company, the dues outstanding of income-tax as well as sales tax on account of any dispute, are as follows: Name of the statute income tax act, 1961 Nature of dues income tax demands raised against the Company amount (rs) 6,968,429 986,735 2,743,256 7,653,227 276,914 1,619,600 5,053,440 sales tax act, 1956 sales tax demands raised on the company 4,534,537 5,069,846 Period to which the amount relates a.Y. 2001 02 a.Y. 2002 03 a.Y. 2003 04 a.Y. 2004 05 a.Y. 2005 06 a.Y. 2006 07 a.Y. 2007 08 a.Y. 2004 05 a.Y. 2005 06 Forum where dispute is pending high Court high Court high Court high Court deputy Comm. of income tax deputy Comm. of income tax Comm. of income tax (appeals) asst. Comm. of sales tax (appeals) asst. Comm. of sales tax (appeals)
(x) (xi) (xii)
The Company does not have accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. The Company has not taken any loans from financial institution, bank and not issued any debentures. according to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the order are not applicable to the Company. (xiv) in our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. accordingly, the provisions of clause 4(xiv) of the said order are not applicable to the Company. (xv) according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.
(xvi) The Company has not taken any term loans during the year. (xvii) according to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (xviii) the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies act, 1956. (xix) the Company did not have any outstanding debentures during the year. (xx) the Company has not raised any money by public issues during the year.
(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For S.R. BATLIBOI & Co. Firm registration number: 301003E Chartered accountants Place: Mumbai Date: February 14, 2011 per Shrawan Jalan Partner Membership No.: 102102
55

auditors report Balance Sheet Profit and Loss Account
BALANCE Sheet
as at december 31, 2010
(rupees) Particulars schedule december 31, 2010 december 31, 2009
SOuRCES OF FuNDS
Shareholders Funds share Capital reserves and surplus totAL a B 70,968,440 3,554,086,835 3,625,055,275 C 1,773,869,090 775,399,236 998,469,854 829,817 999,299,671 Investments Deferred Tax Assets (Net) (Refer Note 6 - Schedule P) Current Assets, Loans And Advances sundry debtors Cash and Bank Balances Loans and advances other Current assets Less: CUrreNt LIABILItIeS AND proVISIoNS Current Liabilities Provisions Net Current Assets totAL Significant Accounting Policies and Notes to the Accounts P i J 1,283,396,888 428,755,568 1,712,152,456 1,328,934,576 3,625,055,275 1,329,089,698 350,988,857 1,680,078,555 1,088,316,845 4,122,263,397 E F G h 964,189,743 1,219,895,840 782,050,670 74,950,779 3,041,087,032 694,978,977 1,345,360,048 618,332,273 109,724,102 2,768,395,400 d 1,175,057,829 121,763,199 1,099,008,181 604,554,675 494,453,506 636,682,868 1,131,136,374 1,814,901,674 87,908,504 72,250,000 4,050,013,397 4,122,263,397
APPLICATION OF FuNDS
Fixed Assets gross Block Less: Accumulated Depreciation/Amortization Net Block Capital Work-In-Progress (including Capital Advances)
the schedules referred to above and notes to accounts form an integral part of the Balance sheet as per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company secretary Mumbai, February 14, 2011 h.N. Sinor director Rama Bijapurkar director thomas schiller director B. v. Bhargava director For and on behalf of the Board of Directors of CRISIL Limited
56
PROFIT AND LOSS ACCoUNt

for the year ended december 31, 2010
(rupees) Year Ended december 31, 2009 4,416,234,450 228,301,849 4,644,536,299 1,595,390,298 474,151,290 532,786,491 138,792,701 2,741,120,780 1,903,415,519 416,894,000 3,308,000 759,960 (20,918,303) 400,043,657 1,503,371,862 1,503,371,862 1,766,363,716 3,269,735,578 541,875,000 180,625,000 722,500,000 122,788,876 150,337,186 2,274,109,516 3,269,735,578 208.08 7,225,000
Particulars
schedule
Year Ended december 31, 2010 5,287,120,859 736,222,592 6,023,343,451 1,989,045,470 612,391,462 702,641,687 202,085,414 3,506,164,033 2,517,179,418 565,438,050 694,760 (33,854,695) (88,469) 532,189,646 1,984,989,772 27,444,953 1,957,544,819 2,274,109,516 4,231,654,335 1,264,375,000 177,421,100 1,441,796,100 238,766,646 195,754,482 2,355,337,107 4,231,654,335 271.61 7,207,093
INCOME
income from operations other income totAL K L
ExPENDITuRE
Personnel Expenses Establishment Expenses Other Expenses depreciation Profit Before Tax tax expense (refer Note 4 - Schedule p) Current tax Fringe Benefit Tax Wealth tax Deferred Tax Benefit income tax of earlier years Profit After Tax and before prior period items Prior period expense, net of tax (Refer Note 25- Schedule P) Profit After Tax Balance brought forward from previous year Profit Available for Appropriation Dividend interim Proposed Final Dividend totAL Dividend Tax on Interim and Proposed final dividend transfer to General reserve Balance carried to Balance sheet Basic and Diluted Earnings Per Share - Nominal value of rs.10 Number of Shares used in Computing Earnings Per Share (Refer Note 23-Schedule P) Significant Accounting Policies and Notes to the Accounts M N o
The schedules referred to above and notes to accounts form an integral part of the Profit and Loss Account. as per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 Rama Bijapurkar director roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company secretary Mumbai, February 14, 2011 thomas schiller director B. v. Bhargava director h.N. Sinor director For and on behalf of the Board of Directors of CRISIL Limited
57

Cash Flow Statement schedules forming part of accounts additional information
CASh FLOW StAteMeNt

(rupees) Year Ended december 31, 2010 Year Ended december 31, 2009 1,903,415,519 138,792,701 28,779,951 (11,697,236) 4,730,151 6,260,835 (96,467,976) 46,223,090 (103,316,981) (3,472,603) (3,932,500) (4,062,840) 1,905,252,111 57,239,978 (125,816,612) (2,935,407) (7,693,160) (35,532,491) 243,355,536 83,422,182 11,809,574 2,129,101,711 (369,624,276) 1,759,477,435 (755,687,962) 5,108,651 (804,062,841) 950,569,979 (406,398,250) 602,837,790 Contd...
a.
CASh FLOW FROM OPERATINg ACTIvITIES :

Profit before tax Adjustments for : depreciation Provision for leave encashment Provision for gratuity (Refer Note 25- Schedule P) unrealised Foreign exchange loss Loss / (Profit)on sale of fixed assets Profit on sale of investments Provision for bad debts interest on deposits Foreign Currency Translation Reserve interest on loan to subsidiary dividend income - other investments dividend income from current investments Operating profit before working capital changes Movements in working capital - (increase)/decrease in sundry debtors - (increase)/decrease in sundry deposits - (increase)/decrease in loans - (increase)/decrease in advances - (increase)/decrease in accrued revenue - increase/(decrease) in sundry creditors - increase/(decrease) in fee received in advance - increase/(decrease) in other liabilities Cash generated from operations - taxes paid Net cash generated from operating activities - (A) (326,090,312) 81,319,460 88,570 39,301,568 36,219,356 (66,101,765) 39,128,197 (22,980,349) 1,898,372,683 (548,230,556) 1,350,142,127 (93,092,109) 318,967,166 (100,000,000) 1,016,997,252 (865,469,188) 607,586,055 (111,292,051) (99,000,000) 202,085,414 32,277,116 22,472,536 7,176,625 (250,971,101) (355,262,165) 49,702,921 (71,261,822) (2,880,388) (2,694,835) (6,603,721) (23,732,040) 2,117,487,958 2,517,179,418
B.
CASh FLOW FROM INvESTINg ACTIvITIES :

Purchase of fixed assets Proceeds from sale of fixed assets investments in mutual funds sale proceeds from investments in mutual funds Investment in fixed deposits Proceeds from fixed deposit maturity/renewal Payment made for acquisition of Pipal research analytics and information services india Private Limited Investment in National Commodity and Derivative Exchange Limited
58
CASh FLOW StAteMeNt

(rupees) Year Ended december 31, 2010 Sale proceeds from Investment in National Commodity and Derivative Exchange Limited investment in irevna Limited, uK sale proceeds from investments in Gas strategies Group Limited interest on deposits dividend income - other investments dividend income from current investments Net cash generated from/(used in) investing activities - (B) 50,211,339 6,603,721 23,732,040 1,043,645,034 (1,680,735,331) (796,858,024) 2,694,835 (302,235,982) (2,777,134,502) (383,347,341) 727,316,190 343,968,849 (383,347,341) 343,968,849 343,968,849 *Cash and cash equivalent includes earmarked unpaid dividend amount (Refer Schedule F) Significant accounting policies and notes to the Accounts schedule P The schedules referred to above and notes to accounts form an integral part of the Cash flow statement. as per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company secretary Mumbai, February 14, 2011 h.N. Sinor director Rama Bijapurkar director thomas schiller director B. v. Bhargava director For and on behalf of the Board of Directors of CRISIL Limited 108,761,860 3,932,500 4,062,840 (290,875,433) (927,981,037) 3,472,603 (10,000,000) (934,508,434) 534,093,568 193,222,622 727,316,190 534,093,568 727,316,190 727,316,190 (144,760,380) 58,728,000 374,433,189 Year Ended december 31, 2009 -
C.
CASh FLOW FROM FINANCINg ACTIvITIES :

dividend and dividend tax paid Payment towards Buy Back of Shares (Refer Note 23schedule P) interest on loan to subsidiary Loan (given) / repaid to Subsidiary (Net) Net cash generated from/(used in) financing activities - (C) Net Increase/(decrease) in cash and cash equivalents (A+B+C) Cash and cash equivalents - opening balance Cash and Cash Equivalents - Closing balance Net Increase/(decrease) in Cash and Cash equivalents Components of Cash and Cash Equivalents as at * With banks on current account
59

Cash Flow Statement Schedules forming part of Accounts additional information
SChEDuLES
annexed to and forming part of the accounts
(rupees) december 31, 2010 december 31, 2009
SChEDuLE A:
Share Capital Authorised Capital: 10,000,000 (P.Y. 10,000,000) Equity Shares of Rs.10 each Issued, Subscribed and Paid up: 7,096,844 (P.Y. 7,225,000) Equity Shares of Rs. 10 each fully paid up [Of the above, 600,000 (P.Y. 600,000) Equity Shares are held by Standard & Poor's International LLC, uSA and 3,120,948 (P.Y. 3,120,948) Equity Shares are held by S&P India, LLC (a whollyowned subsidiary of The Mcgraw-hill Companies, Inc., The ultimate holding Company)] (Refer Note 23, Schedule P) totAL 70,968,440 72,250,000 70,968,440 72,250,000 100,000,000 100,000,000
SChEDuLE B:
reserves and Surplus securities Premium account opening Balance Less:- used towards buy back of equity shares (Refer Note 23, schedule P) totAL Capital reserve Capital redemption reserve opening Balance Add:- Transfer on account of buy back of equity shares (Refer Note 23, schedule P) totAL Profit And Loss Account General reserve opening Balance Add : Transferred From Profit And Loss Account Less :Transfer To Capital Redemption Reserve Account (Refer Note 23, Schedule P) Less :used Towards Buy Back Of Equity Shares (Refer Note 23, schedule P) totAL hedging Reserve Account Foreign Currency Translation Reserve totAL 1,052,568,228 25,548,217 (2,880,388) 3,554,086,835 1,178,781,699 4,050,013,397 (320,686,393) 1,178,781,699 195,754,482 (1,281,560) 1,028,444,513 150,337,186 1,281,560 2,355,337,107 2,274,109,516 1,281,560 122,232,111 474,890,071 122,232,111 474,890,071 (474,890,071) 474,890,071 -
60
SChEDuLE C:
(rupees)
Accumulated Depreciation/Amortization as on december 31, 2010 161,565,478 197,950,101 300,057,988 497,024,381 41,594,186 575,676,956 1,773,869,090 1,099,008,181 527,636,314 138,792,701 61,874,340 604,554,675 604,554,675 202,085,414 31,240,853 775,399,236 29,800,347 65,599,059 95,399,406 29,303,999 9,572,115 12,988,111 25,888,003 317,515,858 71,264,154 436,402 388,343,610 108,680,771 15,706,183 480,277,550 998,469,854 494,453,506 69,660,087 28,018,380 1,199,041 96,479,426 203,578,562 68,869,130 18,347,864 7,679,033 79,537,961 118,412,140 67,071,771 100,875,639 89,420,215 11,957,698 128,856,605 494,453,506 89,405,254 9,283,842 8,938,266 89,750,830 71,814,648 96,271,578 upto January 1, 2010 For the Year deductions / Adjustments upto december 31, 2010 as on december 31, 2010 as on december 31, 2009 Net Block deductions / Adjustments 24,111,354 13,785,654 2,112,903 614,762 13,459,578 54,084,251 134,509,633
Fixed Assets
Gross Block at Cost
As on January 1, 2010
additions
SChEDuLES
Buildings (refer note
185,676,832
below)
Furniture and Fixtures
135,940,901
75,794,854
(Refer note below)
Office Equipments (Refer
170,535,726
131,635,165
note below)
Computers
406,936,073
90,703,070
vehicles
41,261,697
13,792,067
Leasehold improvements
158,656,952
417,020,004
totAL
1,099,008,181
728,945,160
Previous Year
1,074,140,647
159,377,167
Note:Adjustment with respect to building, furniture and office equipment are on account of certain premises being classified as held for sale in the current year (Previous Year net written down value Rs.61,265,807). Refer Schedule h.
61

SChEDuLES
(rupees) december 31, 2010 december 31, 2010 december 31, 2009 december 31, 2009
SChEDuLE D:
Investments A. Long term (Unquoted - At Cost) investment in subsidiaries (Companies under same management) 49,999,900 (P.Y. 49,999,900) Equity Shares of CRISIL Risk and Infrastructure Solutions Limited of re. 1 each, fully paid up 2,056,000 Equity Shares of Irevna Limited, uK, of 1 each, fully paid up (P.Y 8,000,000 Equity Shares of 0.001 each) (Purchase of 2,048,000 equity shares of 1 each, during the current year) 50,000 (P.Y. 50,000) Equity Shares of CrisiL Credit information services Limited of rs.10 each, fully paid up 704,018 (P.Y.704,018) Equity Shares of CrisiL irevna argentina of ars 1 each, fully paid up 10,000 Equity Shares (P.Y. Nil) of Pipal research analytics and information services india Private Limited of rs.10 each, fully paid up. other investments 637,000 (P.Y. 637,000) Equity Shares of india index services and Products Limited of rs.10 each, fully paid up 1,875,000 (P.Y. 3,600,000) Equity Shares of National Commodity and Derivative Exchange Limited of rs.10 each, fully paid up (Purchase 900,000 share during the year & Sold 2,625,000 shares during the year) 300,000 (P.Y. 300,000) Equity Shares of Caribbean information and Credit rating agency of us$1 each, fully paid up Less: Provision for diminution in value of investment Nil (P.Y. 40,000) Equity Shares of Gas strategies Group Limited of 1 each,fully paid up. Sold 40,000 Equity shares during the year total Long term (At Cost) - {A} 13,642,500 6,369,970 6,369,970 49,999,900 49,999,900
840,144,239
695,383,859
500,000
500,000
10,501,668
10,501,668
111,292,051
56,250,000
36,000,000
13,642,500
(13,642,499)
1 -
(13,642,499)
1 16,185,438
1,075,057,829
814,940,836
62
SChEDuLES
(rupees) december 31, 2010 december 31, 2010 december 31, 2009 december 31, 2009
SChEDuLE D: (Contd)
Investments B. Current Investments (At Cost or Market Value, whichever is lower) * Investments In Mutual Funds (unquoted) Nil units (P.Y.5,474,352 units) of Rs.10 each of Sundaram BNP Paribas Money Fund - Institutional Plan (Sold 5,474,352 units during the current year) Nil units (P.Y. 62,578 units) of Rs.10 each of Tata Liquid Super high Investment Fund - Appreciation (sold 62,578 units during the current year) Nil units (P.Y.15,108,936 units) of rs.10 each of Principal Cash Management Fund-Liquid Option institutional Premium Plan - dividend reinvestment (sold 15,108,936 units during the current year) Nil units (P.Y.148,269 units) of Rs.10 Each of uTI Liquid Cash Plan institutional - dividend reinvestment (sold 148,269 units during the current year) Nil units (P.Y.3,510,065 units) of rs.10 each of iCiCi Prudential institutional Liquid Plan - dividend reinvestment (sold 3,510,065 units during the current year) Nil units (P.Y.12,294,430 units) of Rs.10 each hDFC Liquid Fund Premium Plan - Dividend reinvestment (sold 12,294,430 units during the current year) Investments In Mutual Funds (Quoted) 1,000,000 units of Rs 10 Each ICICI Prudential FMP Series 53 - 1 Year Plan d cumulative. (Purchased 1,000,000 units during the current year) total Investments in Mutual Funds {B} total Investments {A} + {B} *Aggregate market value of Companys investment in unquoted Mutual Funds 100,000,000 1,175,057,829 100,343,000 999,960,838 1,814,901,674 1,010,359,771 100,000,000 95,897,998
100,000,000
151,099,933
151,151,946
351,083,706
150,727,255
63

SChEDuLES
SChEDuLE E:
Sundry Debtors debts outstanding for a period exceeding six months - unsecured, Considered good - unsecured, Considered doubtful other debts - unsecured, Considered good Less : Provision for Doubtful Debts (Refer Note 12 - Schedule P) totAL 964,189,743 694,978,977 925,318,476 (38,260,332) 639,389,491 (37,885,893) 38,871,267 38,260,332 55,589,486 37,885,893
SChEDuLE F:
Cash and Bank Balances Balances with Scheduled Banks on Current accounts on deposit accounts on unpaid dividend accounts Deposit includes Fixed Deposits with Banks Rs.9,982,393 (P.Y. Rs.9,050,586) marked as lien for guarantees issued by Banks on behalf of the Company. (Refer Note 3 - Schedule P) totAL 1,219,895,840 1,345,360,048 335,974,528 875,926,991 7,994,321 723,582,976 618,043,858 3,733,214
SChEDuLE g:
Loans and Advances (unsecured, Considered Good) Loans to staff Advance Recoverable In Cash or Kind for value to be Received Advance Tax (Net of provision) sundry deposits Loan to Subsidiary (Refer Note 13 - Schedule P) totAL 20,379,888 54,888,128 372,046,672 334,735,982 782,050,670 20,468,458 94,189,696 17,807,987 453,366,132 32,500,000 618,332,273
SChEDuLE h:
other Current Assets Interest Accrued on Fixed Deposits with Banks accrued revenue interest accrued on Loan to irevna Limited, uK Forward Contract Receivable assets held for sale (refer note on schedule C) totAL 26,964,080 5,025,030 1,300,312 25,548,217 16,113,140 74,950,779 5,913,597 42,544,698 61,265,807 109,724,102
64
SChEDuLES
SChEDuLE I:
Current Liabilities Sundry Creditors (Refer Note 5 - Schedule P) : due to micro, small and medium enterprises others Fees received in advance unclaimed Dividend (to be credited to Investor Education & Protection Fund, as and when due) other Liabilities totAL 76,458,678 1,283,396,888 99,439,027 1,329,089,698 604,041,367 594,902,522 7,994,321 670,143,132 555,774,325 3,733,214
SChEDuLE J:
provisions Proposed dividend Corporate dividend tax thereon Provision for Tax (Net of Advance Tax) Provision for Leave Encashment Provision for gratuity (Refer Note 25- Schedule P) totAL 177,421,100 29,467,427 5,797 164,900,814 56,960,430 428,755,568 180,625,000 30,697,219 132,623,698 7,042,940 350,988,857
65

SChEDuLES
(rupees) Year Ended december 31, 2010 Year Ended december 31, 2009
SChEDuLE K:
Income from operations income from rating services income from research services totAL 2,840,877,156 2,446,243,703 5,287,120,859 2,389,016,014 2,027,218,436 4,416,234,450
SChEDuLE L:
other Income interest on deposits [tds -rs 6,021,547 (P.Y.rs.18,545,398)] interest on Loan to subsidiary [tds -rs.195,745 (P.Y.rs.616,836 )] Profit on sale of Fixed Assets (Net) dividend income - other investments Profit from sale of Investments (Net) dividend income from Current investments Miscellaneous Income totAL 71,261,822 2,694,835 250,971,101 6,603,721 355,262,165 23,732,040 25,696,908 736,222,592 103,316,981 3,472,603 3,932,500 96,467,976 4,062,840 17,048,949 228,301,849
SChEDuLE M:
personnel expenses salaries and Bonus Contribution to : Provident Fund Other Funds Staff Training and Welfare Expenses Less : Recoveries from Subsidiaries towards Overhead Allocated totAL 1,850,301,764 53,663,432 28,483,086 83,505,239 (26,908,051) 1,989,045,470 1,501,246,285 44,062,860 17,292,394 52,882,683 (20,093,924) 1,595,390,298
SChEDuLE N:
establishment expenses Repairs and Maintenance - Buildings Repairs and Maintenance - Others Electricity Communication Expenses insurance rent rates and taxes Less : Recoveries from Subsidiaries towards Overhead Allocated totAL 62,386,080 65,121,325 52,648,040 57,344,074 737,719 377,882,978 2,229,262 (5,958,016) 612,391,462 64,228,740 59,848,424 50,289,703 61,925,664 1,480,132 238,796,824 2,520,445 (4,938,642) 474,151,290
66
SChEDuLES
(rupees) Year Ended december 31, 2010 Year Ended december 31, 2009
SChEDuLE O:
other expenses Printing and stationery Conveyance and travelling Books and Periodicals vehicle Expenses Remuneration to Non-whole time Directors (Refer Note 7 - Schedule P) Business Promotion and advertisement Foreign Exchange Loss (net) Professional Fees Software Purchase & Maintenance Expenses Provision for Bad debts Loss on sale of fixed assets Auditors' Remuneration (Refer Note 10 - Schedule P) Recruitment Expenses sales Commission seminars and Conferences Miscellaneous Expenses Less : Recoveries from Subsidiaries towards Overhead Allocated totAL 26,747,996 137,199,732 21,850,275 1,421,061 13,303,380 18,989,323 29,491,424 347,745,059 20,764,613 49,702,921 3,069,450 18,300,560 18,483,453 1,166,381 5,978,613 (11,572,554) 702,641,687 24,763,358 99,194,494 18,374,714 1,042,450 9,776,800 14,074,817 16,580,033 179,778,515 28,050,949 46,223,090 6,260,835 2,591,708 9,349,473 76,780,929 1,440,113 8,070,821 (9,566,608) 532,786,491
SChEDuLE P:
Significant Accounting Policies And Notes to the Accounts 1. Nature of operations CRISIL is a globally-diversified analytical company providing ratings and research services. CrisiL is indias leading ratings agency and the foremost provider of highend research to the worlds largest banks and leading corporations. With sustainable competitive advantage arising from strong brand, unmatched credibility, market leadership across businesses, and large customer base, CrisiL deliver analysis, opinions, and solutions that make markets function better. 2. Statement policies 2.1 Basis of Preparation The financial statements have been prepared to comply in all material respects of Significant Accounting
with the Notified accounting standard by Companies accounting standards rules, 2006 as amended and the relevant provisions of the Companies act, 1956 (the Act). The financial statements have been prepared under the historical cost convention on an accrual basis. the accounting policies have been consistently applied by the Company. 2.2 use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to that make affect estimates the and assumptions amounts of reported
assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.
67

SChEDuLES
2.3 Fixed Assets Fixed assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing 2.4 depreciation Depreciation is provided using the Straight Line Method ( SLM) as per the useful lives of the assets estimated by the management, or at the rates prescribed under schedule xIv of the Act, whichever is higher. assets Buildings Furniture & Fixtures Office Equipments Computers vehicles Rates (SLM) 5.00% 10.00% 10.00% 33.33% 33.33% Schedule xIv Rates (SLM) 1.63% 6.33% 4.75% 16.21% 9.50% the asset to its working condition for its intended use. Items of fixed asset held for disposal are stated at lower of the net book value and net realisable value and are shown under other current assets.
Leasehold Improvements are amortized over the lease term or useful life of the asset, whichever is less. Leasehold improvements are amortized over the period of 8.5 years to 9 years in the current year Fixed assets having original cost of less than Rs. 5,000 individually, are depreciated fully in the year / period of purchase. 2.5 impairment the carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. an impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. the recoverable amount is the greater of the assets net selling price and value in use. in assessing value in use, the estimated future cash flows are discounted to the present value at interest rate specific to the asset and in case where the specific rate is not available at the weighted average cost of capital which is adjusted for country risk/currency risk. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life 2.6 operating Leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term. 2.7 investments investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as longterm investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. however, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. 2.8 revenue recognition revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Income from Operations income from operations comprises of income from initial rating and surveillance services, global analytical services, credit assessments, special assignments and
68
SChEDuLES
subscriptions to information products and services. initial rating fees are deemed to accrue at 94% on the date the rating is awarded and the balance 6% is recorded equally over 11 months subsequent to the month in which the rating was awarded. Surveillance fee and subscription to information products are accounted on a time proportion basis. Fees received for credit assessments and special assignments are fully recognised as income in the year in which such assessments/assignments agreement with client. Interest Income revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend Income Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. dividend from subsidiaries is recognised even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of schedule vI of the Act. Profit /(loss) on sale of investment Profit /(loss) on sale of investment is accounted when the sale / transfer deed is executed. on disposal of such investments, the difference between the carrying amount and the disposal proceeds, net of expenses, is recognised in the Profit and Loss account. the carrying amount of investments is determined using weighted average cost method. 2.9 Retirement and other employee benefits Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are carried out or milestones achieved or as per are due. there are no other obligations other than the contribution payable to the respective authorities or trusts. Gratuity liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. the actuarial valuation is done as per projected unit credit method. actuarial gains/losses are immediately taken to profit and loss account and are not deferred. 2.10 Foreign Currency Transactions Initial Recognition Foreign currency transactions are by recorded in reporting currency
applying to the foreign currency amounts the average exchange rates for the month in which the transaction takes place. Conversion Foreign currency monetary items are reported using the closing rates. Non monetary items which are carried in terms of historical costs denominated in a foreign currency are reported using the exchange rate at the date of transaction. Exchange Difference Exchange differences, arising on settlement of monetary items or on reporting Companys monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expense in the year in which they arise. Forward Contract Forward contracts are entered into, to hedge the foreign currency risk of the underlying outstanding at the balance sheet date and also to hedge the foreign currency risk of firm commitment or highly probable forecast transactions.
69

SChEDuLES
The premium or discount on forward contracts that are entered to hedge the foreign currency risk of the underlying outstanding at the balance sheet date arising at the inception of each contract, is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as income or as expense for the year. In relation to the forward contracts entered into, to hedge the foreign currency risk of the underlying outstanding at the balance sheet date, the foreign exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date or the settlement date where the transaction is settled during the reporting year, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. such exchange differences are recognised in the profit and loss account in the reporting year in which the exchange rates change. the Company has adopted the principles of AS 30 of Financial and its Instruments: in financial Recognition respect Measurement derivative that relate to a firm commitment or a highly probable forecast transaction and that do not qualify for hedge accounting, have been recorded at fair value at the reporting date and the resultant gain / loss has been credited / debited to profit and loss account for the year. 2.11 taxes on income tax expense comprises of current, deferred, and wealth tax. Current income tax and wealth tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian income tax act of 1961 enacted in india. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. in situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. at each balance sheet date, the Company re-assesses unrecognised deferred tax assets. it recognises unrecognised deferred tax assets to the extent that it has become reasonably certain that sufficient future taxable income will be available against which such deferred tax assets can be realised.
instruments that are not covered by AS 11 Accounting for the Effects of Changes in Foreign Exchange Rates and that relate to a firm commitment or a highly probable forecast transaction. in accordance with AS 30, such derivative financial instruments, which qualify for cash flow hedge accounting and where the Company has met all the conditions of as 30, are fair valued at the balance sheet date and the resultant gain / loss is credited / debited to the hedging Reserve account included in the reserves and Surplus. This gain / loss would be recorded in the profit and loss account when the underlying transactions affect earnings. other derivative instruments
70
SChEDuLES
the carrying amount of deferred tax Assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent it is no longer reasonably or virtually certain, as the case may be, that sufficient future taxable income will be available against which Deferred Tax Asset can be realised. Any such write down is reversed to the extent that it becomes reasonably or virtually certain, as the case may be, that sufficient future taxable income will be available. 2.12 segment reporting Policies Segment Policies: the Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole. Identification of segments: the Companys operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the geographical locations of customers. Inter segment transfers: the Company generally accounts for intersegment services and transfers as if the services or transfers were to third parties at current market prices. Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items: unallocable income and expenses includes general corporate income and expense items which are not allocated to any business segment. 2.13 Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. 2.14 Provisions A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. 2.15 Cash and Cash Equivalents Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
71

SChEDuLES
3. Details of Contingent Liabilities and Capital Commitments are as under : (rupees) Year Ended dec 31, 2010 1. 2. Bank guarantee in the normal course of business Disputed Income Tax & Sales Tax Demand: (i) (ii) 3. Pending before appellate authorities in respect of which the Company is in appeal decided in Companys favour by appellate authorities and department is in further appeal 16,070,858 22,513,543 17,797,299 66,364,093 5. 23,359,888 18,212,021 89,025,159 139,647,654 9,982,393 Year Ended dec 31, 2009 9,050,586
Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for
totAL 4. Income tax the tax year of the Company being the year ending March 31, 2011, the provision for tax for the year is the aggregate of the provision made for the three months ended March 31, 2010 and the provision for the nine months upto december 31, 2010. the tax provision for nine months has been arrived at using the effective tax rate for the period april 1, 2010 to March 31, 2011, the ultimate tax liability of which will be determined for the period April 1, 2010 to March 31, 2011.
The Company has the process of identification of suppliers registered under the the Micro, Small and Medium Act, from Enterprises 2006 by suppliers. Development obtaining (MSMED)
confirmations
There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006 to whom the company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.
6. Components of Deferred tax Assets and Liabilities are: (rupees) as on dec 31, 2010 Deferred tax Liability depreciation / amortisation Tax attributable towards tax holiday deduction Disallowance under section 40(a) totAL (A) Deferred tax Asset Provision for Leave Encashment Provision for Gratuity Lease rent amortisation Provision for Bonus and Commission Provision for bad debts deferment of rating fees Disallowance under section 40(a) totAL (B) Net Deferred tax Asset / (Liabilities) (A-B) 55,498,929 15,186,273 32,016,485 67,865,625 14,307,731 8,826,779 2,038,599 195,740,421 121,763,199 44,590,724 2,007,830 18,606,511 29,096,571 14,892,808 8,756,658 117,951,102 87,908,504 (67,477,222) (6,500,000) (73,977,222) (29,313,871) (728,727) (30,042,598) as on dec 31, 2009
72
SChEDuLES
7. Managerial remuneration: (rupees) Year Ended dec 31, 2010 Managing Director : salary Commission Contribution to Provident Fund Perquisites totAL Non - Whole time Directors: Fees paid Commission totAL 1,020,000 12,283,380 13,303,380 1,000,000 8,776,800 9,776,800 13,002,119 10,670,000 467,964 490,438 24,630,521 11,310,956 6,800,000 428,400 461,586 19,000,942 Year Ended dec 31, 2009
Note: As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to Directors is not included above. Computation of net profit in accordance with Section 349 of the Companies Act, 1956, for calculation of commission payable to Directors: (rupees) Year Ended dec 31, 2010 Profit before tax as per Profit and Loss Account 1. 2. 3. 4. 5. remuneration to Whole-time directors Remuneration to Non Whole-time Directors Provision for doubtful debts (Profit)/Loss on Sale of Fixed Assets Profit from sale of long term Investments (Net) Net Profit under Section 198 Managerial Remuneration Payable to whole-time director upto 5% of the Net Profit (as computed above) Rs.100,780,969 (P.Y. Rs.99,233,859), restricted to : Commission Payable to non whole-time directors upto 3% of the Net Profit (as computed above) Rs.60,468,581 (P.Y.Rs.59,540,316), restricted to : 2,517,179,418 24,630,521 13,303,380 49,702,921 (250,971,101) (338,225,751) 2,015,619,388 24,630,521 Year Ended dec 31, 2009 1,903,415,519 19,000,942 9,776,800 46,223,090 6,260,835 1,984,677,186 19,000,942
12,283,380
8,776,800
The Company depreciates fixed assets at the rates which are higher than the rates prescribed in Schedule xIv of the Act. Accordingly no adjustments are made on account of depreciation in computation of profit as per section 349 of the Act. The Company has obtained approval from Ministry of Corporate Affairs for payment of commission upto 3% of the profit as per section 349 of the Act to non whole time directors
73

SChEDuLES
8. earnings in foreign currency (on accrual basis): (rupees) Year Ended dec 31, 2010 rendering of rating and research services dividend from subsidiaries / associates totAL 9. payments in Foreign Currency a) value of imports calculated on C.I.F basis The value of imports calculated on C.I.F basis for capital goods was Nil (P.Y Rs.111,597,474) (rupees) Year Ended dec 31, 2010 b) Expenditure in foreign currency Foreign travel sales Commission Other Expenses totAL 10. Auditors remuneration includes : (rupees) Year Ended dec 31, 2010 as auditor In any other matter: Certification work Out of Pocket Expenses totAL 357,500 44,450 3,069,450 125,000 41,708 2,591,708 2,667,500 Year Ended dec 31, 2009 2,425,000 58,863,864 18,545,553 125,931,994 203,341,411 26,983,567 77,204,417 13,665,835 117,853,819 Year Ended dec 31, 2009 2,788,221,401 2,788,221,401 Year Ended dec 31, 2009 2,341,548,985 747,500 2,342,296,485
11. Amount remitted during the year in foreign currency, on account of dividends: (rupees) Year Ended dec 31, 2010 Number of shareholders Number of equity shares of Rs 10 each held by them on which dividend was paid amount remitted (rs) 2 3,720,948 65,116,590 Year Ended dec 31, 2009 2 3,720,948 409,304,280
12. Sundry debtors includes amount receivable from following Companies under same management: (rupees) as on dec 31, 2010 irevna LLC, u.s. irevna Limited, u.K. irevna Poland sp.Zo.o Standard & Poors LLC Standard & Poors South Asia Services Private Limited Mcgraw-hill Education India Private Limited Mcgraw-hill Education Companies Inc. totAL 215,670,743 250,332,991 4,334,204 108,087,894 3,508,663 345,602 582,280,097 as on dec 31, 2009 189,475,071 88,381,661 88,370,218 9,791,805 9,851 376,028,606
74
SChEDuLES
13. Loans and advances in the nature of loans given to companies under same management: (rupees) as on dec 31, 2010 CRISIL Risk and Infrastructure Solutions Limited irevna Limited (uK) Maximum Amount Outstanding During the year 14. Segment reporting Business Segments: The Company has two major business segment: Ratings and Research. A description of the types of products and services provided by each reportable segment is as follows: rating services includes credit ratings 334,735,982 367,235,982 as on dec 31, 2009 32,500,000 50,219,166
for corporates, banks, small and medium enterprises (SME), training in the credit rating field, credit analysis services, grading services and global analytical services research segments provides high end equity research, industry reports, customised research assignments, subscription to data services and iPo gradings (rupees)
segment reporting for the year ended december 31, 2010 Particulars operating revenue segment results Add / (Less) unallocables: 1. unallocable income interest income Profit on sale of investments Profit on sale of fixed assets others unallocable Expenditure depreciation Profit Before Tax Tax Expense Profit After Tax but before prior period item Prior period expense, net of tax (Refer Note 25- Schedule P) Profit After Tax Non-cash expenses other than depreciation and amortisation Segment Assets* investments segment debtors Segment Liabilities* Fees Received in advance revenue by Geographic segments Country india united Kingdom united states of america others totAL 404,679,406 190,223,116 594,902,522 (rupees) 2,498,899,458 1,307,308,826 1,271,276,105 209,636,470 5,287,120,859 73,956,657 355,262,165 250,971,101 56,032,669 (38,287,229) (202,085,414) 2,517,179,418 (532,189,646) 1,984,989,772 27,444,953 1,957,544,819 131,897,525 Business segments ratings 2,840,877,156 1,183,754,363 research 2,446,243,703 837,575,106
totAL 5,287,120,859 2,021,329,469
2. 3.
88,823,285
43,074,240
360,109,568
968,307,928 642,340,507
968,307,928 1,002,450,075
75

SChEDuLES
segment reporting for the Year ended december 31,2009 (rupees) Particulars operating revenue segment results Add / (Less) unallocables : 1. unallocable income interest income Profit on sale of investments Profit on sale of fixed assets others 2. 3. unallocable Expenditure depreciation Profit Before Tax Tax Expense Profit After Tax but before prior period item Prior period expense, net of tax Profit After Tax Non-cash expenses other than depreciation and amortisation Segment Assets* : investments segment debtors Segment Liabilities* : Fees Received in advance 377,381,301 159,084,403 536,465,704 349,169,666 712,255,497 383,695,204 712,255,497 732,864,870 20,770,218 8,496,782 1,503,371,862 29,267,000 106,789,584 96,467,976 23,802,039 (4,683,049) (138,792,701) 1,903,415,519 (400,043,657) 1,503,371,862 Business segments ratings 2,389,016,014 1,007,409,721 research 2,027,218,436 812,421,949 totAL 4,416,234,450 1,819,831,670
revenue by Geographic segments Country india united Kingdom united states of america others totAL Notes to Segmental Results :
(rupees) 2,074,685,465 1,157,447,660 1,096,712,290 87,389,035 4,416,234,450
*Fixed Assets used in the Companys business or Liabilities contracted have not been identified to any of the reportable segments, as the Fixed assets and services are used interchangeably between segments. the Company believes that it is currently not practical to provide segment disclosure, except as disclosed above, relating to total assets and liabilities since a meaningful segregation of the available data is not feasible. the Company recovered certain common expenses from subsidiaries based on management estimates and the same form a part of the segment results and disclosed as recoveries in schedules to the Profit and Loss Account.
76
SChEDuLES
15. List of related parties Parties Related parties where control exists The Mcgraw-hill Companies, Inc CRISIL Risk and Infrastructure Solutions Limited irevna Limited, uK irevna LLC, usa CrisiL Credit information services Limited CrisiL irevna Poland sp.zo.o CrisiL irevna argentina s.a. CRISIL Irevna Information Technology (hangzhow) Co., Ltd* Pipal research analytics and information services india Private Limited other related parties S&P India, LLC Standard & Poors LLC Standard & Poors International LLC, uSA Standard & Poors South Asia Services Private Limited Mcgraw-hill Education India Private Limited india index services and Products Limited Key Management Personnel roopa Kudva Managing Director & Chief Executive Officer Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Joint venture The ultimate holding Company subsidiary subsidiary subsidiary of irevna Limited, uK subsidiary subsidiary of irevna Limited, uK subsidiary subsidiary subsidiary relationship
*Company incorporated but yet to commence business operations. 16. related party Disclosure (rupees) Name of the related party Standard & Poors LLC Nature of transaction Professional services rendered reimbursement of expenses amount receivable S&P India, LLC Standard & Poors South asia services Private Limited Standard & Poors international LLC, usa The Mcgraw-hill Companies, inc Mcgraw-hill Education india Private Limited dividend share Capital outstanding Professional services rendered reimbursement of expenses amount receivable dividend share Capital outstanding Expenses Recovered amount receivable Expenses Recovered amount receivable Year Ended dec 31, 2010 814,068,721 1,051,712 108,087,894 624,189,600 31,209,480 12,145,726 6,310,462 3,508,663 120,000,000 6,000,000 35,441 377,179 345,602 Year Ended dec 31, 2009 714,369,995 12,255 88,370,218 312,094,800 31,209,480 7,141,028 18,220,525 9,791,805 60,000,000 6,000,000 61,018 9,851 -
77

SChEDuLES
related party Disclosure (Contd) (rupees) Name of the related party CRISIL Risk and infrastructure solutions Limited Nature of transaction revenue share paid Year Ended dec 31, 2010 175,000 Year Ended dec 31, 2009 -
revenue share received Loan given during the year Loan repaid during the year Loan outstanding interest income Expenses Recovered share of overhead expenses received Amount Receivable (Net) investment outstanding irevna Limited, uK Professional services rendered Sales Commission Expense Reimbursement of Expenses amount receivable (net) investment outstanding Loan interest income irevna LLC, usa Professional services rendered Sales Commission Expense Reimbursement of Expenses amount receivable (net) CrisiL Credit information services Limited CrisiL irevna argentina, s.a. CrisiL irevna Poland sp.zo.o india index services and Products Limited investment outstanding investment outstanding Professional Fees amount Payable (net) Professional Fees amount Payable (net) Reimbursement of Expenses dividend received investment outstanding
1,615,297 32,500,000 1,394,523 60,684,151 44,438,621 11,060,017 49,999,900 874,969,400 4,707,956 5,563,050 250,332,991 840,144,239 334,735,982 1,300,227 506,946,987 13,837,597 215,670,743 500,000 10,501,668 78,486,170 9,400,607 27,796,743 2,992,129 7,365,795 4,458,979 6,369,970 111,292,051
4,382,333 42,500,000 32,500,000 32,500,000 3,472,603 18,597,585 34,599,178 6,997,204 49,999,900 705,583,924 56,747,690 1,310,755 83,641,360 695,383,859 400,326,156 20,033,239 588,427 187,756,642 500,000 10,501,668 5,200,946 3,185,000 6,369,970 -
Pipal research analytics and investment outstanding information services india Private Limited *Roopa Kudva remuneration paid
24,630,521
19,000,942
*Note: As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to directors is not included above.
78
SChEDuLES
17. The Company has 49% interest in India Index Services and Products Limited (a joint venture in India with National Stock Exchange). As per the Accounting Standard relating to Financial Reporting of Interest in Joint venture (AS 27) notified by Companies Accounting Standards Rules, 2006 as amended,the details of interest in the Joint venture are as under : (rupees) unaudited Year Ended dec 31, 2010 assets reserves and surplus Liabilities income Expenses Tax Expense Contingent Liability 18. operating Lease The Company has taken certain office premises on non cancellable operating lease basis. Some of these agreements have a price escalation clause. details as regards payments and future commitments are as under : (rupees) Year Ended dec 31, 2010 Lease Payment recognised in Profit and Loss Account Future Minimum Lease Payments : Not later than One Year Later than One Year & not later than Five Years Later than FiveYears totAL 19. Gratuity and Leave Encashment Benefits The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. 356,023,588 1,834,142,069 1,740,130,224 3,930,295,881 421,533,034 2,412,726,949 1,202,509,669 4,036,769,652 377,882,978 Year Ended dec 31, 2009 238,796,824 169,426,889 151,399,383 11,657,506 86,332,820 15,470,305 22,353,567 9,034,660 Year Ended dec 31, 2009 122,961,959 106,994,133 9,597,826 66,213,270 10,057,344 17,611,858 3,238,192
The following tables summarise the components of net benefit expense recognised in the Profit and Loss account and the funded status and amounts recognised in the Balance sheet for the respective plans. Profit and Loss Account: Net employee benefit expense (recognised in Employee Cost)
79

SChEDuLES
(rupees) Year Ended dec 31, 2010 Current service cost Interest cost on defined benefit obligation Expected return on plan assets Net actuarial (gain)/ loss recognised in the year Losses/(gains) on Acquisition/Divestiture Net gratuity Benefit Expense Balance Sheet: Details of Provision for gratuity Benefit (rupees) as on dec 31, 2010 Present value of funded obligations Less: Fair value of plan assets Net Liability 108,091,000 (51,130,570) 56,960,430 as on dec 31, 2009 53,926,870 (46,883,930) 7,042,940 14,275,170 4,093,320 (3,434,500) 40,819,410 55,753,400 Year Ended dec 31, 2009 12,961,540 2,806,950 (2,574,720) 3,277,670 16,471,440
Changes in the present value of the defined benefit obligation are as follows: Opening Defined Benefit Obligation Current service Cost interest Cost actuarial (gain)/loss Benefits paid Closing Defined Benefit Obligation Changes in the fair value of plan assets are as follows: Opening Fair value of plan assets Expected return on plan assets actuarial gain/ (loss) Contribution by employer asset acquired on acquisition Benefits paid Closing Fair value of Plan Assets 46,883,930 3,434,500 2,992,816 5,835,910 (8,016,586) 51,130,570 22,892,753 2,574,720 (1,457,120) 28,168,677 (5,295,100) 46,883,930 53,926,870 14,275,170 4,093,320 43,812,226 (8,016,586) 108,091,000 41,632,929 12,961,540 2,806,950 1,820,551 (5,295,100) 53,926,870
Details of experience adjustment on plan assets and liabilities are as follows : (rupees) as on dec 31, 2007 Experience adjustment on plan assets Experience adjustment on plan liabilities 3,334,554 3,252,147 as on dec 31, 2008 3,533,558 (142,570) as on dec 31, 2009 (1,457,120) (2,662,050) as on dec 31, 2010 2,992,816 (41,461,230)
80
SChEDuLES
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: (rupees) Year Ended dec 31, 2010 Investment with Insurer actual return on plan assets (Based on interest rate declared by the insurer as at 31st March 2010/2009) The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. the principal assumptions used in determining gratuity for the Companys plans is as below: Year Ended dec 31, 2010 discount rate Estimated rate of return on plan assets Expected Employee Turnover Age : 21-44 Years Age : 44-57 Years Expected Employers Contribution next year (Rupees) 6.5% 6.0% 32,500,000 6.5% 6.0% 30,000,000 8.20% 8.50% (rupees) Year Ended dec 31, 2009 8.20% 7.50% 100% 9.25% Year Ended dec 31, 2009 100% 9.30%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. (rupees) 20. Details of unhedged foreign exposure Current asset Current Liability as on dec 31, 2010 652,667,781 16,727,711 as on dec 31, 2009 379,493,153 6,458,730
21. CRISIL Limited sold balance 10% stake in gas Strategies group Limited in September 2010. 22. during the current year, company has initiated a hedge programme to mitigate foreign exchange (forex) related risk. Initially the hedge programme covered only forex receivable for which CRISIL followed AS 11 Accounting for the Effects of Changes in Foreign Exchange Rates. however, at the later part of the year, CrisiL has increased the hedge programme to cover forecasted revenue as against receivable as a part of risk management strategy. Accounting for revenue hedge is done as per guidelines prescribed under AS 30 Financial Instruments: Recognition and Measurement, wherein mark to market on forward contracts are routed through hedging reserve account. Forward Contract Outstanding as at 31st December 2010 : Currency usd GBP EuR amount 16,000,000 6,000,000 3,000,000 Amount in INR 752,973,336 442,547,500 187,153,750
81

SChEDuLES
23. In accordance with Sec 77A, 77AA and 77B of the Companies act,1956 and pursuant to the buy back announcement made by the Company on september 9, 2010 the Company has bought back from the open market through stock exchanges 128,156 equity shares of rs. 10 each during the year for a total consideration have been of Rs.796,858,024 which subsequently extinguished. amount of rs. 320,686,393 being the balance premium on buy back has been appropriated from General reserve. the Board of directors, at its meeting held on september 9, 2010 approved the buyback of equity shares of the Company. 24. on 3rd december 2010, CrisiL Limited acquired 100% ownership in Pipal Research analytics and information services india Private Limited. 25. Prior period item includes gratuity expense rs.27,444,953 (net of tax). 26. previous year comparatives Previous years figures have been regrouped where necessary to conform to current years classification.
Consequently, an amount of rs.1,281,560 being the nominal value of equity shares bought back has been transferred to Capital redemption reserve account from General reserve. an amount of rs. 474,890,071 being the premium on buy back has been appropriated from securities Premium. an
as per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company secretary Mumbai, February 14, 2011 h.N. Sinor director Rama Bijapurkar director thomas schiller director B. v. Bhargava director For and on behalf of the Board of Directors of CRISIL Limited
82
statement pursuant to section 212 of the Companies act ,1956 relating to subsidiary Company (rupees)
CRISIL Risk and infrastructure services Limited services (i) Pvt. Ltd. december 31, 2010 50,000 Equity shares of rs.10 each, fully paid up 100% 100% 100% 100% 100% each, fully paid up fully paid up each, fully paid up fully paid up shares of ars 1 of PLN 500 each, shares of 1 us$ 200 each, 741,072 Equity 100 Equity Shares 2,056,000 Equity 1 Equity Share of shares of re.1 31, 2010 31, 2010 31, 2010 31, 2010 31, 2010 31, 2010 10,000 Equity shares of rs.10 each, fully paid up. 100% 100% december december december december december december information information argentina s.a. Poland sp.Zo.o. analytics and CrisiL Credit CrisiL irevna CrisiL irevna irevna Limited, uK irevna LLC, us Pipal research
1. Name of the subsidiary company
SChEDuLES
solutions Limited
2. The financial period of the subsidiary Company ended on
3. (a)
Number of shares in the subsidiary held by CRISIL
49,999,900 Equity
Limited at the above date
each, fully paid up
(b)
Extent of interest of CRISIL in the capital of the
subsidiary
4.
Net aggregate amount of the profits/ (losses) of the
subsidiary so far it concerns the members of CrisiL 50,254,003 78,795,946 (13,962) 4,496,776 1,932,775 (11,085) 5,232,195 2,039,590 (5,562,061) 712,566 748,498 (7,966,442) 2,878,489 -
as is not dealt with the Companys Accounts :
(a)
Profits / (losses) for the period ended December
31,2010 of the subsidiary (rupees)
(b)
Profits / (losses) for the previous financial year of
the subsidiary, since it became the subsidiary of
CrisiL Limited (rupees)
5.
Net aggregate amount of the Profits /(Losses) of the
subsidiary so far as dealt with or provision is made -
for those losses in CrisiL Limited accounts
(a)
For the subsidiarys Financial period ended
december 31, 2010 (rupees)
(b)
For the previous year since it became a subsidiary
of CrisiL Limited (rupees)
For and on behalf of the Board of Directors of CRISIL Limited h.N. Sinor director thomas schiller director
Rama Bijapurkar
B. v. Bhargava
director
director
roopa Kudva
Shrikant Dev Company secretary
Managing Director & Chief Executive Officer
Mumbai, February 14, 2011
83

Cash Flow Statement schedules forming part of accounts Additional Information
ADDITIONAL INForMAtIoN
as required under Part Iv of Schedule vI to the Companies Act, 1956 Balance Sheet abstract and Companys general Business Profile
i. registration details Registration No. state Code Balance sheet date Capital raised during the Year (amount in rs. thousands) Public issue rights issue Bonus issue Private Placement Preferential offer of shares under Employee Stock Option Scheme Position of Mobilisation and Deployment of Funds (Amount in Rs.Thousands) total Liabilities total assets Source of Funds Paid up Capital Reserves & Surplus secured Loans unsecured Loans Application of Funds Net Fixed Assets Capital Work-In-Progress (including Capital Advances) investments deferred tax asset Net Current Assets Miscellaneous Expenditure accumulated Losses Iv. Performance of Company (amount in rs.thousands) turnover Total Expenditure Profit/(Loss) Before Tax Profit/(Loss) After Tax Earnings Per Share (Rs.) dividend rate% generic Names of Three principal Products/Services of Company (as per monetary terms) Production description Credit rating research services 42363 11 december 31, 2010 3,625,055 3,625,055 70,968 3,554,087 998,470 830 1,175,058 121,763 1,328,935 6,023,343 3,533,609 2,489,735 1,957,546 271.61 2,000
ii.
iii.
v.
Item Code No. Not Applicable Not Applicable
For and on behalf of the Board of Directors of CRISIL Limited Rama Bijapurkar director roopa Kudva Managing Director & Chief Executive Officer thomas schiller director h.N. Sinor director Mumbai, February 14, 2011 Shrikant Dev Company secretary B. v. Bhargava director
84
AuDITORS report
the Board of Directors of CrISIL Limited 1. We have audited the attached Consolidated Balance Sheet of CRISIL Group (Group), as at December 31, 2010, and also the Consolidated Profit and Loss account and the Consolidated Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the CRISILs management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We did not audit the financial statements of six subsidiaries, whose financial statements reflect total assets of Rs. 2,481,508,212 as at December 31, 2010, total revenue of Rs. 1,947,959,235 and net cash inflow amounting to Rs. 104,655,019 for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditors. 4. As stated in Note 11 of the Notes to the Consolidated Financial Statements, the audited financial statements are not available in respect of one joint venture company, which represents total assets of Rs. 169,426,889 as at December 31, 2010, total revenue of Rs. 84,512,567 and total cash inflow of Rs. 48,926,972 for the year then ended. Consequently the unaudited financial statements of one joint venture company for the year ended December 31, 2010 as certified by CRISILs Place: Mumbai Date: February 14, 2011 For S.R. BATLIBOI & Co. Firm registration number: 301003E Chartered Accountants per Shrawan Jalan Partner Membership No.: 102102 (iii) in the case of the Consolidated Cash Flow statement, of the cash flows for the year ended on that date. management has been used for consolidation and we have relied upon the same. 5. We report that the consolidated financial statements have been prepared by CRISILs management in accordance with the requirements of Accounting Standards (AS) 21, Consolidated financial statements and Accounting Standard (AS) 27, Financial Reporting of Interests in Joint Ventures, notified by Companies Accounting Standards Rules, 2006, as amended. 6. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components and based on unaudited financial statements for the year ended December 31, 2010 of a joint venture company, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India, read with the matter stated in paragraph 4 above and Note 11 of the Consolidated Financial Statements of the Group: (i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at December 31, 2010; (ii) in the case of the Consolidated Profit and Loss account, of the profit for the year ended on that date; and
85
Consolidated financial statements

Consolidated Balance Sheet Consolidated Profit and Loss Account
CONSOLIDATED BALANCE Sheet

as at December 31, 2010
(Rupees) Particulars Schedule December 31, 2010 December 31, 2009
SOuRCES OF FuNDS
Shareholders Funds Share Capital Reserves and Surplus TOTAL A B 70,968,440 3,873,552,940 3,944,521,380 C 3,098,908,198 850,733,770 2,248,174,428 854,150 2,249,028,578 D 262,041,253 142,329,182 E F G H 1,085,900,744 1,613,102,807 510,107,447 221,294,902 3,430,405,900 Less: Current Liabilities And Provisions Current Liabilities Provisions Net Current Assets TOTAL Significant Accounting Policies and Notes to the Accounts P I J 1,676,889,605 462,393,928 2,139,283,533 1,291,122,367 3,944,521,380 1,615,201,639 387,092,645 2,002,294,284 1,224,459,505 4,338,113,099 1,843,681,824 642,705,151 1,200,976,673 636,682,868 1,837,659,541 1,175,246,327 100,747,726 922,088,397 1,575,661,514 618,127,947 110,875,931 3,226,753,789 72,250,000 4,265,863,099 4,338,113,099
APPLICATION OF FuNDS
Fixed Assets Gross Block Less: Accumulated Depreciation/Amortization Net Block Capital Work-In-Progress (including Capital Advances)
INVESTMENTS
Deferred Tax Assets (Net) (Refer Note 5 - Schedule P) Current Assets, Loans And Advances Sundry Debtors Cash and Bank Balances Loans and Advances Other Current Assets
The schedules referred to above and notes to accounts form an integral part of the Balance Sheet. As per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered Accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 Roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company Secretary Mumbai, February 14, 2011 H.N. Sinor Director Rama Bijapurkar Director Thomas Schiller Director B. V. Bhargava Director For and on behalf of the Board of Directors of CRISIL Limited
86
CONSOLIDATED PROFIT AND LOSS ACCOuNT

for the year ended December 31, 2010
(Rupees) Particulars Schedule Year Ended December 31, 2010 6,284,427,569 730,314,730 7,014,742,299 2,581,730,350 712,685,671 838,879,245 212,581,735 4,345,877,001 2,668,865,298 628,506,315 692,020 (42,355,766) (88,469) 586,754,100 2,082,111,198 27,444,953 2,054,666,245 2,496,718,603 4,551,384,848 1,264,375,000 177,421,100 1,441,796,100 239,524,456 195,754,482 2,674,309,810 4,551,384,848 285.09 7,207,093 P Year Ended December 31, 2009 5,372,723,640 230,046,844 5,602,770,484 2,078,587,258 549,060,912 752,007,960 148,515,395 3,528,171,525 2,074,598,959 484,466,659 3,856,288 772,850 (22,273,438) 466,822,359 1,607,776,600 1,607,776,600 1,885,109,355 3,492,885,955 541,875,000 180,625,000 722,500,000 123,330,166 150,337,186 2,496,718,603 3,492,885,955 222.53 7,225,000
INCOME
Income from Operations Other Income TOTAL K L
EXPENDITuRE
Personnel Expenses Establishment Expenses Other Expenses Depreciation TOTAL Profit before Tax tax expense Current Tax Fringe Benefit Tax Wealth Tax Deferred Tax Income Tax of earlier years Profit After Tax and before prior period items Prior period expense, net of tax (Refer Note 16 Schedule P) Profit After Tax Balance brought forward from previous year Amount Available for Appropriation Dividend Interim Proposed Final Dividend TOTAL Dividend Tax on Interim and Proposed final dividend Transfer to General Reserve Balance carried to Balance Sheet Basic and Diluted Earnings Per Share - Nominal value of Rs.10 (Refer Note 14 - Schedule P) Number of Shares used in Computing Earnings Per Share* (Refer Note 14 - Schedule P) Significant Accounting Policies and Notes to the Accounts *Weighted Average
M N O
The schedules referred to above and notes to accounts form an integral part of the Profit & Loss Account. As per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered Accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 For and on behalf of the Board of Directors of CRISIL Limited Rama Bijapurkar Director Roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company Secretary Mumbai, February 14, 2011 Thomas Schiller Director B. V. Bhargava Director H.N. Sinor Director
87

Consolidated Cash Flow Statement
CONSOLIDATED CASH FLOW STATeMeNT

(Rupees) Particulars Year Ended December 31, 2010 2,668,865,298 212,581,735 30,646,383 28,191,311 4,372,399 5,526,836 (251,327,478) (345,799,613) 82,427,271 (81,215,474) (2,144,742) (23,732,040) 2,328,391,886 (280,443,311) 91,934,018 1,747,186 33,321,256 (24,901,609) (93,152,744) 75,268,820 (22,310,037) 2,109,855,465 (650,368,698) 1,459,486,767 (498,538,005) 323,722,834 (205,791,252) (99,000,000) 374,433,189 58,728,000 1,130,634,750 148,515,395 29,983,152 (12,758,357) 1,448,303 6,220,663 6,411,942 (96,467,976) 70,559,890 (106,525,306) (747,500) (4,062,840) 2,117,176,325 (227,394,475) (125,616,543) (3,285,268) (3,586,301) (38,102,615) 299,726,187 101,887,109 55,682,025 2,176,486,444 (434,550,103) 1,741,936,341 (759,533,751) 7,077,090 (804,062,841) 909,654,517 Contd... Year Ended December 31, 2009 2,074,598,959
A.
CASH FLOW FROM OPERATING ACTIVITIES:

Profit before tax Adjustments for : Depreciation Provision for leave encashment Provision for gratuity (Refer Note 16- Schedule P) Foreign Currency Translation Reserve unrealised Foreign exchange loss (Profit)/ Loss on sale of fixed assets (Profit) on sale of investments Provision for bad debts Interest on deposits Dividend income from Other investments Dividend Income from long term investments Operating profit before working capital changes Movements in working capital - (Increase)/decrease in sundry debtors - (Increase)/decrease in sundry deposits - (Increase)/decrease in loans - (Increase)/decrease in advances - (Increase)/decrease in accrued income - Increase/(decrease) in sundry creditors - Increase/(decrease) in fee received in advance - Increase/(decrease) in other liabilities Cash generated from operations - Taxes paid Net cash generated from operating activities - (A)
B.
CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of fixed assets (Refer Note 15- Schedule P) Proceeds from sale of fixed assets Investments in mutual funds Investment in National Commodity and Derivative Exchange Limited Sale proceeds from Investment in National Commodity and Derivative Exchange Limited Sale proceeds from investments in Gas Strategies Group Limited Sale proceeds from investments in mutual funds
88
CONSOLIDATED CASH FLOW STATeMeNT

(Rupees) Particulars Payment made for acquisition of Pipal Research Analytics and Information Services India Private Limited Investment in fixed deposits Proceeds from fixed deposit maturity/renewal Interest on deposits Dividend Income from long term investments Dividend income from current investments Net cash generated from/(used in) investing activities - (B) (975,058,928) 623,410,714 54,447,812 23,732,040 2,144,742 701,573,845 (796,858,024) (1,680,735,331) (2,477,593,355) (316,532,743) 2,275,822 (314,256,921) 909,593,014 595,336,093 (314,256,921) 175,126 595,160,967 595,336,093 Significant Accounting Policies and Notes to the Accounts (Refer Schedule p) The schedules referred to above and notes to accounts form an integral part of the Cash flow statement. As per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered Accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 For and on behalf of the Board of Directors of CRISIL Limited Rama Bijapurkar Director Roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company Secretary Mumbai, February 14, 2011 Thomas Schiller Director B. V. Bhargava Director H.N. Sinor Director (424,205,928) 610,913,750 112,183,371 747,500 4,062,840 (343,163,452) (928,522,327) (928,522,327) 470,250,562 470,250,562 439,342,452 909,593,014 470,250,562 91,584 909,501,430 909,593,014 Year Ended December 31, 2010 (111,292,051) Year Ended December 31, 2009 -
C.
CASH FLOW FROM FINANCING ACTIVITIES :

Buy Back of Shares Dividend and dividend tax paid Net cash generated from/(used in) financing activities - (C) Net Increase/(decrease) in cash and cash equivalents (A+B+C) Add : Adjustment towards acquisition Net Increase/(decrease) in cash and cash equivalents after divesture adjustment Cash and cash equivalents - Opening balance Cash and cash equivalents - Closing balance Net Increase/(decrease) in Cash and Cash equivalents Components of cash and cash equivalents as at* Cash on hand With banks on current account
*Cash and cash equivalent includes earmarked unpaid dividend amount (Refer Schedule F)
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Schedules annexed to and forming part of the Consolidated Accounts
SCHEDuLES
annexed to and forming part of the Consolidated Accounts
(Rupees) December 31, 2010 December 31, 2009
SCHEDuLE A:
Share Capital Authorised Capital: 10,000,000 (P.Y. 10,000,000) Equity Shares of Rs.10 each Issued, Subscribed and Paid up: 7,096,844 (P.Y. 7,225,000) Equity Shares of Rs. 10 each fully paid up [Of the above, 600,000 (P.Y. 600,000) Equity Shares are held by Standard & Poors International LLC, uSA and 3,120,948 (P.Y. 3,120,948) Equity Shares are held by S&P India, LLC (a wholly owned subsidiary of The McGraw-Hill Companies, Inc.- The ultimate Holding Company)] (Refer Note 14, Schedule P) TOTAL 70,968,440 72,250,000 70,968,440 72,250,000 100,000,000 100,000,000
SCHEDuLE B:
Reserves & Surplus Securities Premium Account Opening Balance Less:- used towards buy back of equity shares (Refer Note 14, Schedule P) TOTAL (A) Capital Reserve (B) Capital Redemption Reserve Opening Balance Add:- Transfer on account of buy back of equity shares (Refer Note 14, Schedule P) TOTAL (C) Profit and Loss Account (D) General Reserve as per last Balance Sheet Opening Balance Add : Transfer from Profit and Loss Account Less :Transfer to Capital Redemption Reserve account (Refer Note 14, Schedule P) Less :used towards buy back of equity shares (Refer Note 14, Schedule P) TOTAL (e) Foreign Currency Translation Reserve as per last Balance Sheet (Add)/Less : Movement during the year TOTAL (F) Hedging Reserve Account (G) TOTAL (A+B+C+D+e+F+G) 1,052,568,228 (6,759,385) (4,372,399) (2,386,986) 25,548,217 3,873,552,940 1,178,781,699 (7,798,081) 1,038,696 (6,759,385) 4,265,863,099 (320,686,393) 1,178,781,699 195,754,482 (1,281,560) 1,028,444,513 150,337,186 1,281,560 2,674,309,810 2,496,718,603 1,281,560 122,232,111 474,890,071 122,232,111 474,890,071 (474,890,071) 474,890,071
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SCHEDuLE C:
(Rupees)
Accumulated Depreciation/Amortization As on December 31, 2010 upto January 1, 2010 As on December 31, 2010 As on December 31, 2009 691,968,593 96,271,578 124,774,999 212,663,701 443,670,753 3,339,781 33,436,550 29,218,923 98,916,019 850,733,770 642,705,151 124,324,077 17,060,880 489,934,245 2,248,174,428 1,200,976,673 69,747,719 101,976,307 97,036,014 14,079,521 129,896,941 1,200,976,673 825,225,891 201,346,215 25,360,338 31,664,360 124,005,074 71,814,648 For the year On Assets sold Adjustments upto December 31, 2010 1,160,859 203,107 861,413 494,587 89,750,830 82,883,092 103,574,187 825,225,891 202,507,074 25,563,445 32,525,773 124,499,661 161,565,478 207,658,091 316,237,888 567,994,830 46,279,803 588,850,264 3,098,908,198 1,843,681,824 559,849,234 148,515,395 642,705,151 212,581,735 37,989,666 65,659,478 30,053,340 65,522,898 36,743,777 10,756,089 18,280,943 344,751,897 76,605,399 436,402 22,749,859 71,314,827 28,901,850 1,421,576 4,779,086 70,436,056 18,791,691 8,912,479 2,567,824 89,405,254 9,283,842 8,938,266 494,587 861,413 203,107 1,160,859 Net Block Adjustments
Fixed Assets
Gross Block at Cost
SCHEDuLES
As on January 1, 2010
Additions
Deductions
Intangibles 5,187,123 10,587,158 25,180,448 11,879,979 52,834,708 -
Goodwill On Consolidation
691,968,593
133,257,298
Customer Relationship
202,507,074
Brand
25,563,445
Non Compete
32,525,773
Goodwill
124,499,661
Fixed Assets
Buildings ( Refer note below)
185,676,832
24,111,354
Furniture and Fixtures (Refer note below)
140,183,775
78,792,655
16,505,462
Office Equipments (Refer note below)
173,291,134
135,155,846
2,796,250
Computers -
441,787,911
101,641,233
614,762
Vehicles
50,823,298
16,661,032
21,204,527
Leasehold Improvements
159,950,281
417,020,004
TOTAL
1,843,681,824 1,267,624,021
65,232,355
Previous Year
1,820,873,185
163,222,956
140,414,317
Note
1. Adjustment with respect to building, furniture and office equipment are on account of certain premises being classified as held for sale in the current year (Previous Year net written down value Rs.61,265,807). Refer Schedule H.
2. Adjustment column refers to asset and depreciation addition on account of acquisition of 100% ownership in Pipal Research Analytics and Information Services India Private Limited ( Refer Note 15, Schedule P)
3. Additions in Intangible Assets is with respect to acquisition of business assets from Pipal Research Corporation, uS.
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SCHEDuLES
(Rupees) December 31, 2010 December 31, 2010 December 31, 2009 December 31, 2009
SCHEDuLE D:
Investments A. Long Term (unquoted - At Cost ) 1,875,000 (P.Y.3,600,000) Equity Shares of National Commodity and Derivative Exchange Limited of Rs.10 each, fully paid up (Purchased 900,000 shares during the year and Sold 2,625,000 shares during the year) 300,000 (P.Y. 300,000) Equity Shares of Caribbean Information and Credit Rating Agency of uS $ 1 each, fully paid up Less: Provision for diminution in value of Investment Nil (P.Y. 40,000) Equity Shares of Gas Strategies Group Limited of 1 each,fully paid up. Sold 40,000 Equity Shares during the year Total Long Term (At Cost) - {A} B. Current Investments (At Cost Or Market Value, whichever is lower) * Investments In Mutual Funds (unquoted) Nil units (P.Y.5,474,352 units) of Rs.10 each of Sundaram BNP Paribas Money Fund Institutional Plan (Sold 5,474,352 units during the current year ) Nil units (P.Y. 62,578 units) of Rs.10 each of Tata Liquid Super High Inv. Fund Appreciation (Sold 62,578 units during the current year) Nil units (P.Y1,51,08,936 units ) of Rs.10 each of Principal Cash Management FundLiquid Option Institutional Premium Plan Dividend Reinvestment (Sold 1,51,08,936 units during the current year ) Nil units (P.Y.1,48,269 units) of Rs.10 each of uTI Liquid Cash Plan Institutional Dividend reinvestment (Sold 1,48,269 units during the current year) Nil units (P.Y 35,10,065 units) of Rs.10 each of ICICI Prudential Institutional Liquid Plan - Dividend Reinvestment (Sold 35,10,065 units during the current year) Nil units (P.Y 12,294,430 units)of Rs.10 each HDFC Liquid Fund Premium Plan Dividend Reinvestment 150,727,255 351,083,706 151,151,946 151,099,933 100,000,000 95,897,998 13,642,500 56,250,000 36,000,000
13,642,500
(13,642,499)
1 -
(13,642,499)
1 25,647,990
56,250,001
61,647,991
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SCHEDuLES
(Rupees) December 31, 2010 December 31, 2010 December 31, 2009 December 31, 2009
SCHEDuLE D: (Contd)
Investments (Sold 12,294,430 units during the current year) Investments In Mutual Funds (Quoted) 10,00,000 units of Rs 10 each ICICI Prudential FMP Series 53 - 1 Year Plan D cumulative. (Purchased 10,00,000 units during the current year) Total Investments in Mutual Funds {B}* Proportional Share of Investments in Mutual Fund by Joint Venture Company {C} (unquoted -At Cost Or Market Value, whichever is lower) * Total Investments {A}+{B}+{C} *Aggregate market value of Companys investment in Mutual Funds 100,000,000 105,791,252 999,960,838 113,637,498 100,000,000 -
262,041,253 206,208,363
1,175,246,327 1,123,994,558
SCHEDuLE E:
Sundry Debtors Debts outstanding for a period exceeding six months - Considered good - Considered doubtful Other debts - Considered good - Considered doubtful Less : Reserve for Doubtful Debts Amount receivable from following Companies under same management Standard & Poors LLC Standard & Poors South Asia Services Private Limited The McGraw-Hill Companies, Inc McGraw-Hill Education India Private Limited 112,518,352 3,508,663 345,602 116,372,617 85,049,309 9,791,805 9,851 94,850,965 1,016,227,355 (84,946,679) 1,085,900,744 854,354,649 (82,913,774) 922,088,397 69,673,389 84,946,679 103,845,678 46,801,844
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SCHEDuLES
SCHEDuLE F:
Cash & Bank Balances Cash on Hand Balances with Scheduled Banks On Current Accounts On Deposit Accounts On unpaid Dividend Accounts Deposit includes Fixed Deposits with Banks Rs.63,093,157 (P.Y.Rs.38,464,490) marked as lien for Guarantees issued by Banks on behalf of the Company. 175,126 587,166,646 1,017,766,714 7,994,321 91,584 905,768,216 666,068,500 3,733,214
1,613,102,807
1,575,661,514
SCHEDuLE G:
Loans and Advances (unsecured, Considered Good) Loans to Staff Advance Recoverable In Cash or kind for value to be received Advance Taxes paid Sundry Deposits 22,473,838 64,547,157 27,114,310 395,972,142 510,107,447 24,437,194 95,746,746 18,334,207 479,609,800 618,127,947
SCHEDuLE H :
Other Current Assets Interest Accrued On Fixed Deposit With Banks Accrued Revenue Forward Contract Receivable Assets held for sale (Refer Note 1 on Schedule C) Grant Receivable (Refer Note 17 - Schedule P) 33,833,088 67,455,537 25,548,217 16,113,140 78,344,920 221,294,902 7,065,426 42,544,698 61,265,807 110,875,931
SCHEDuLE I:
Current Liabilities Sundry Creditors Fees received in advance unclaimed dividend (to be credited to Investor Education & Protection Fund, when due) Other Liabilities Deferred Grant Revenue (Refer Note 17 - Schedule P) 780,020,531 663,507,639 7,994,321 147,022,194 78,344,920 1,676,889,605 855,973,161 588,238,819 3,733,214 167,256,445 1,615,201,639
SCHEDuLE J :
Provisions Proposed Dividend Corporate Dividend Tax thereon Provision for Tax Provision for Leave Encashment Provision for Gratuity (Refer Note 16 - Schedule P) 177,421,100 29,467,427 1,605,822 186,498,605 67,400,974 462,393,928 180,625,000 31,106,826 14,303,245 152,615,026 8,442,548 387,092,645
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SCHEDuLES
SCHEDuLE K :
Income From operations Ratings Services Advisory Services Research Services Proportionate share in Joint Venture 2,840,877,156 515,648,079 2,848,807,782 79,094,552 6,284,427,569 2,389,016,014 599,097,502 2,323,424,858 61,185,266 5,372,723,640
SCHEDuLE L :
other Income Interest on Deposits [TDS Rs.6,211,530) (P.Y Rs.19,117,864)] Profit on sale of Fixed Assets (Net) Dividend Income - Other Investments Profit from sale of Investments (Net) Dividend income from Current Investments Miscellaneous Income Proportionate share in interest income of Joint Venture 75,060,339 251,327,478 2,144,742 345,799,613 23,732,040 26,095,383 6,155,135 730,314,730 106,525,306 747,500 96,467,976 4,062,840 17,215,218 5,028,004 230,046,844
SCHEDuLE M :
personnel expenses Salaries & Bonus Contribution to :Provident Fund Other Funds (Refer Note 16 - Schedule P) Staff Training and Welfare Expenses 2,355,811,588 87,719,755 34,206,861 103,992,146 2,581,730,350 1,932,030,018 58,942,407 19,422,510 68,192,323 2,078,587,258
SCHEDuLE N :
establishment expenses Repairs and Maintenance - Buildings Repairs and Maintenance - Others Electricity Communication expenses Insurance Rent (Refer Note 9 - Schedule P) Rates & Taxes 68,903,656 77,282,991 58,237,200 66,520,368 3,737,318 435,747,372 2,256,766 712,685,671 69,343,582 61,307,113 54,298,400 69,735,265 4,280,215 287,569,871 2,526,466 549,060,912
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SCHEDuLES
SCHEDuLE O :
other expenses Printing and Stationery Conveyance and Travelling Books and Periodicals Vehicle Expenses Remuneration to Non-whole time Directors Business Promotion and Advertisement Foreign Exchange loss(net) Professional Fees Software Purchase & Maintenance Expenses Provision for Bad Debts Loss on sale of fixed assets Auditors Remuneration Recruitment Expenses Seminars & Conferences Miscellaneous Expenses Proportionate share in administrative and other expense of Joint Venture 29,576,217 214,198,404 28,334,419 1,419,838 13,395,770 23,110,630 37,471,017 335,917,111 22,612,779 82,427,271 5,066,421 20,641,342 1,612,936 11,295,356 11,799,734 838,879,245 26,540,488 165,560,909 21,849,510 1,042,450 9,872,369 16,412,915 23,203,928 334,937,423 30,217,846 70,559,890 7,877,953 5,230,049 10,431,132 1,591,220 17,236,049 9,443,829 752,007,960
SCHEDuLE P:
Significant Accounting Policies and notes to the Consolidated Accounts 1. Nature of Operations CRISIL is a globally-diversified analytical company providing ratings, research, and risk and policy advisory services. CRISIL is Indias leading ratings agency and the foremost provider of high-end research to the worlds largest banks and leading corporations. With sustainable competitive advantage arising from strong brand, unmatched credibility, market leadership across businesses, and large customer base, CRISIL deliver analysis, opinions, and solutions that make markets function better. 2. Principles of consolidation 2.1 The consolidated financial statements include the financial statements of CRISIL Limited consolidated with the financial statements of its wholly owned subsidiaries and joint venture (Group).
2.2 The financial statements of the Group and its subsidiaries have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after duly eliminating intra group balances and intra group transactions and resulting gains/ losses as per Accounting Standard 21 - Consolidated Financial Statements notified by Companies Accounting Standards Rules, 2006 as amended and the relevant provisions of the Companies Act, 1956 (the Act). 2.3 The consolidated financial statements are prepared by applying uniform accounting policies in use at the group. 2.4 Interests in joint venture have been accounted by using the proportionate consolidation method as per Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures notified by Companies Accounting Standards Rules, 2006 as amended.
96
SCHEDuLES
2.5 The excess of Groups purchase 2.6 The list of subsidiary companies and joint venture and the Holding Company viz. CRISILs holding directly or through Subsidiaries therein are as under :
consideration over the net assets as at the date of investment, has been recognised as Goodwill on consolidation.
Name of the company
Country of Incorporation
Ownership in % either directly or through Subsidiaries 31-Dec-10 31-Dec-09 100% 100% 100% 100% 49% 100% 100% 100% 100% 100% 100% 49% 100% 100% 100% 100%
CRISIL Risk and Infrastructure Solutions Limited CRISIL Credit Information Services Limited Irevna Limited, uK Irevna LLC, uS India Index Services and Products Limited (Joint Venture) CRISIL Irevna Argentina S.A. CRISIL Irevna Poland Sp.z.o.o. Pipal Research Analytics and Information Services India Private Limited CRISIL Irevna Information Technology (Hangzhow) Co., Ltd*
India India united Kingdom united States India Argentina Poland India China
*Company incorporated but yet to commence business operations. 3. Basis of Preparation The with Consolidated are Accounting Financial in Standard Financial Statements accordance (AS) 21 Statements, (CFS) prepared accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. knowledge Although these estimates of current events and are based upon managements best actions, actual results could differ from these estimates. 3.2 Fixed Assets Fixed less assets are stated at cost, and accumulated depreciation
Consolidated
AS-25 Interim Financial Reporting and AS- 27 Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India (ICAI). The financial statements have been prepared to comply in all material respects with the Notified accounting standard by Companies Accounting Standards Rules, 2006 as amended and the relevant provisions of the Companies Act, 1956 (the Act). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Group. 3.1 use of Estimates The preparation of financial statements in conformity with generally accepted
impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Items of fixed asset held for disposal are stated at lower of the net book value and net realisable value and are shown under other current assets.
97

SCHEDuLES
3.3 Depreciation Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, details of which are as under : Assets Buildings Furniture & Fixtures Office Equipments Computers Vehicles Estimated useful Life 20 Years 4 to 16 Years 4 to 10 Years 3 to 5 Years 3 Years
Leasehold Improvements are amortized over the lease term or useful life of the asset, whichever is less. Leasehold improvements are amortized over the period of 3 years to 9 years in the current year. 3.4 Impairment The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In 3.5 Intangibles Goodwill is amortized on a systematic basis over the best estimate of its useful life. Details of estimated useful life of intangible assets are as under : Assets Goodwill Customer relationship Brand Non compete Estimated useful Life 10 Years 3 to 10 Years 10 Years 3 Years assessing value in use, the estimated future cash flows are discounted to the present value at interest rate specific to the asset and in case where the specific rate is not available at the weighted average cost of capital which is adjusted for country risk/currency risk. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
3.6 Operating Leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term. 3.7 Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However,
provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. 3.8 Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Income from Operations Income from Operations comprises of income from initial rating and surveillance services, global analytical services, credit assessments, special assignments and subscriptions to information products. Initial rating fees are deemed to accrue at 94% on the date the rating is awarded and the
98
SCHEDuLES
balance 6% is recorded equally over 11 months subsequent to the month in which the rating was awarded. Surveillance fee and subscription to information products are accounted on a time proportion basis. Fees received for credit assessments and special assignments are fully recognised as income in the year in which such assessments/ assignments are carried out or milestones achieved or as per agreement with client. Revenue from infrastructure advisory services are recognized as income in the year in which such assessments/assignments are carried out or milestones achieved. Revenue from risk management services comprises of revenue from sale of software and annual maintenance of software. Grants and subsidies are recognized at fair value where there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with. When the grant or subsidy relates to an expense item, it is deferred in the balance sheet and recognized as income over the periods necessary to match it on a systematic basis with the costs which it is intended to compensate Interest Income Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend Income Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognised even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of schedule VI of the Act. Profit /(loss) on sale of investment Profit /(loss) on sale of investment is accounted when the sale / transfer deed is executed . On disposal of such investments, the difference between the carrying amount and the disposal proceeds, net of expenses, is recognised in the profit and loss account . The carrying amount of investment is determined using weighted average cost method. 3.9 Retirement and other employee benefits Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective authorities or trusts. Gratuity liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. Actuarial deferred. In respect of foreign subsidiaries retirement benefits are governed and accrued as per local statutes. 3.10 Foreign Currency Transactions Initial Recognition Foreign currency transactions are recorded in reporting currency by applying to the foreign currency amounts the average exchange rates for the month in which the transaction takes place. Conversion Foreign currency monetary items are reported using the closing rates. Non monetary items which are carried in terms of historical costs denominated in a foreign currency are reported using the exchange rate at the date of transaction. Exchange Difference Exchange differences, arising on settlement of monetary items or on reporting Companys monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial gains/losses are immediately taken to profit and loss account and are not
99

SCHEDuLES
statements, are recognised as income or as expense in the year in which they arise. Forward Contract Forward contracts are entered into, to hedge the foreign currency risk of the underlying outstanding at the balance sheet date and also to hedge the foreign currency risk of firm commitment or highly probable forecast transactions. The premium or discount on forward contracts that are entered into, to hedge the foreign currency risk of the underlying outstanding at the balance sheet date arising at the inception of each contract, is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognised as income or as expense for the year. In relation to the forward contracts entered into, to hedge the foreign currency risk of the underlying outstanding at the balance sheet date, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date or the settlement date where the transaction is settled during the reporting year, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognised in the profit and loss account in the reporting year in which the exchange rates change. The Company has adopted the principles of AS 30 Financial Instruments: Recognition and Measurement in respect of its derivative financial instruments that are not covered by AS 11 Accounting for the Effects of Changes in Foreign Exchange Rates and that relate to a firm commitment or a highly probable forecast transaction. In accordance with AS 30, such derivative financial instruments, which qualify for cash flow hedge accounting and where the Company has met all the conditions of AS 30, are fair valued at the balance sheet date and the resultant gain / loss is credited / debited to the Hedging 3.12 Taxes On Income Tax expense comprises of current, deferred, and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. With respect to foreign subsidiaries tax expense is recorded and recognised as per local statute. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off Reserve Account included in the Reserves and Surplus. This gain / loss would be recorded in the profit and loss account when the underlying transactions affect earnings. Other derivative instruments that relate to a firm commitment or a highly probable forecast transaction and that do not qualify for hedge accounting, have been recorded at fair value at the reporting date and the resultant gain / loss has been credited / debited to profit and loss account for the year. 3.11 Translation of Integral and Non Integral foreign operation The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself. In translating the financial statements of a nonintegral foreign operation for incorporation in financial statements, the assets and liabilities, both monetary and non-monetary, of the nonintegral foreign operation are translated at the closing rate; income and expense items of the non integral foreign operation are translated at average exchange rates and resulting exchange differences are accumulated in a foreign currency translation reserve until the disposal of the net investment. On disposal of the net investment, this amount is transferred to profit and loss account.
100
SCHEDuLES
current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date, the Company reassesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of Deferred Tax Assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a Deferred Tax Asset to the extent it is no longer reasonably or virtually certain, as the case may be, that sufficient future taxable income will be available against which Deferred Tax Asset can be realised. Any such write down is reversed to the extent that it becomes reasonably or virtually certain, as the case may be, that sufficient future taxable income will be available. 3.13 Segment Reporting Policies Segment Policies: The Group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Group as a whole Identification of segments: The Groups operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the geographical locations of customers Inter segment transfers: The Group generally accounts for intersegment services and transfers as if the services or transfers were to third parties at current market prices. Allocation of common costs: Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs unallocable items: unallocable income and expenses includes general corporate income and expense items which are not allocated to any business segment. 3.14 Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. 3.15 Provisions A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. 3.16 Cash and Cash Equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
101

SCHEDuLES
4. Details of Contingent Liabilities and Capital Commitments are as under : (Rupees) Year Ended Dec 31,2010 1. 2. Bank Guarantee in the normal course of business Disputed Income Tax & Sales Tax Demand: (i) Pending before Appellate authorities in respect of which the Group is in appeal (ii) Decided in Groups favour by Appellate authorities and Department is in further appeal 3. Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for 149,392,081 5. Components of Deferred Tax Asset and Liability are: (Rupees) As on Dec 31,2010 Deferred Tax Liability Depreciation / Amortisation Tax attributable towards tax holiday deduction Disallowance under section 40(a) Deferred Tax Asset Provision for Leave Encashment Provision for Gratuity Provision for Bonus and Commission Provision for bad debts Deferment of Rating fees Lease Rent amortisation Depreciation / Amortisation Long term capital loss Disallowance under section 40(a) Net Deferred Tax Asset / (Liability) 6. Segment Reporting Business Segments: The Group has three major business segment: Ratings, Research and Advisory. A description of the types of products and services provided by each reportable segment is as follows: - Rating services includes credit ratings for corporates, banks, small and medium enterprises (SME), training in the credit 60,644,153 16,460,385 73,314,470 19,802,282 8,826,779 33,326,234 2,265,475 3,182,228 217,822,006 142,329,182 48,085,409 2,406,012 32,231,187 18,365,419 8,756,658 19,310,095 1,958,747 47,106 798,902 131,959,535 100,747,726 (68,554,281) (6,514,265) (424,278) (75,492,824) (29,689,226) (1,522,583) (31,211,809) As on Dec 31,2009 175,868,614 17,797,299 89,025,159 22,513,543 18,212,021 45,988,082 30,166,544 63,093,157 Year Ended Dec 31,2009 38,464,890
rating field, credit analysis services, grading services and global analytical services. - Research segments provides high end equity & corporate research, industry reports, customised research assignments, subscription to data services and IPO gradings. -The Advisory segment comprise of
infrastructure advisory and risk management practice.
102
SCHEDuLES
Segment Reporting for the Year ended December 31, 2010 (Rupees) Particulars Operating Revenue Segment Results Add / (Less) unallocables: 1. unallocable Income Interest Income Profit on sale of Fixed Asset Profit on sale of investments Others 2. 3. unallocable Expenditure Depreciation Profit Before Tax Tax Expense Profit After Tax and before prior period items Prior period expense, net of tax Profit After Tax Non-cash expenses other than depreciation and amortisation Segment Assets* : Segment Debtors Segment Liabilities* : Fees Received in advance Revenue by Geographic Segments Country India united Kingdom united States Of America Others TOTAL 2,924,118,268 1,567,311,129 1,456,175,418 336,822,754 6,284,427,569 404,679,405 14,303,125 244,525,109 663,507,639 (Rupees) 360,109,568 215,557,446 595,180,409 1,170,847,423 88,823,285 34,929,283 44,119,608 75,060,339 251,327,478 345,799,613 58,127,297 (49,175,999) (212,581,735) 2,668,865,298 (586,754,100) 2,082,111,198 (27,444,953) 2,054,666,245 167,872,176 Business segments Ratings 2,840,877,156 1,183,754,363 Advisory 515,648,079 79,806,771 Research 2,927,902,334 936,747,171 TOTAL 6,284,427,569 2,200,308,305
103

SCHEDuLES
Segment Reporting for the Year ended December 31, 2009 (Rupees) Particulars Operating Revenue Segment Results Add / ( Less ) unallocables : 1. unallocable Income Interest Income Profit on sale of Fixed Asset Profit on sale of current investments Others 2. 3. unallocable Expenditure Depreciation Profit Before Tax Tax Expense Profit After Tax and before prior period items Prior period expense, net of tax Profit After Tax Non-cash expenses other than depreciation and amortisation Segment Assets* : Segment Debtors Segment Liabilities* : Fees Received in advance Revenue by Geographic Segments Country India united Kingdom united States Of America Others TOTAL Notes to Segmental Results : *Fixed Assets used in the Companys business or Liabilities contracted have not been identified to any of the reportable segments, as the Fixed assets and services are used interchangeably between segments. The Company believes that it is currently not practical to provide segment disclosure, except as disclosed above, relating to total assets and liabilities since a meaningful segregation of the available data is not feasible. The Group recovered certain common expenses from subsidiaries based on management estimates and the same form a part of the segment results. 2,462,053,264 1,286,326,050 1,299,735,946 324,608,380 5,372,723,640 377,381,301 10,479,731 181,069,166 568,930,198 (Rupees) 349,169,666 280,081,519 375,750,986 1,005,002,171 20,770,218 14,829,854 8,168,808 106,525,306 96,467,976 26,220,745 (4,683,055) (148,515,395) 2,074,598,959 (466,822,359) 1,607,776,600 1,607,776,600 43,768,880 Business segments Ratings 2,389,016,014 1,007,409,721 Advisory 130,052,171 Research TOTAL
599,097,502 2,384,610,124 5,372,723,640 861,121,490 1,998,583,382
104
SCHEDuLES
7. List of related parties Parties Related parties where control exists The McGraw-Hill Companies, Inc Other Related parties S&P India, LLC Standard & Poors LLC Standard & Poors International LLC, uSA McGraw-Hill Education India Private Limited Key Management Personnel Roopa Kudva Related Party Disclosure (Rupees) Name of the related party Standard & Poors LLC Nature of transaction Professional Services Rendered Revenue share paid Reimbursement of expenses Amount Receivable S&P India, LLC Dividend Share Capital Outstanding Standard & Poors South Asia Services Private Limited Professional Services Rendered Reimbursement of expenses Amount Receivable Standard & Poors International LLC, uSA Share Capital Outstanding The McGraw-Hill Companies, Inc Expenses Recovered Amount Receivable McGraw-Hill Education India Private Limited Amount Receivable Roopa Kudva* Remuneration paid 345,602 24,630,521 19,000,942 Expenses Recovered 6,000,000 35,441 377,179 6,000,000 61,018 9,851 Dividend 3,508,663 120,000,000 9,791,805 60,000,000 6,310,462 18,220,525 112,518,352 624,189,600 31,209,480 12,145,726 85,049,309 312,094,800 31,209,480 7,141,028 1,728,135 1,051,712 12,255 Year Ended Dec 31,2010 832,495,699 Year Ended Dec 31,2009 735,549,171 Managing Director & Chief Executive Officer Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary The ultimate Holding Company Relationship
Standard & Poors South Asia Services Private Limited Fellow Subsidiary
*Note: As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Group as a whole, the amount pertaining to directors is not included above.
105

SCHEDuLES
8. The Company has 49% interest in India Index Services and Products Limited (a joint venture in India with National Stock Exchange). As per the Accounting Standard relating to Financial Reporting of Interest in Joint Venture (AS 27) notified by Companies Accounting Standards Rules, 2006 as amended,the details of interest in the Joint Venture are as under : (Rupees) unaudited Year Ended Dec 31,2010 Assets Reserves and Surplus Liabilities Income Expenses Tax Expense Contingent Liability 9. operating Lease The Group has taken certain office premises on non cancellable operating lease basis. Some of these agreements have a price escalation clause. Details as regards payments and future commitments are as under : (Rupees) Year Ended Dec 31,2010 Lease Payment recognised in Profit & Loss Account Future Minimum Lease Payments : Not later than One Year Later than One Year & not later than Five Years Later than FiveYears 387,083,281 1,859,368,594 1,740,130,224 3,986,582,099 10. Gratuity and Leave encashment Benefits The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance 441,964,906 2,429,083,909 1,202,509,669 4,073,558,484 435,747,372 Year Ended Dec 31,2009 287,569,871 169,426,889 151,399,383 11,657,506 86,332,820 15,470,305 22,353,567 9,034,660 Year Ended Dec 31,2009 122,961,959 106,994,133 9,597,826 66,213,270 10,057,344 17,611,858 3,238,192
Group in the form of a qualifying insurance policy. The following of tables net summarise benefit the
components
expense
recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans.
106
SCHEDuLES
Profit & Loss Account: Net employee benefit expense (recognised in Employee Cost) (Rupees) Year Ended Dec 31,2010 Current Service cost Interest cost on defined benefit obligation Expected return on plan assets Net actuarial (gain)/ loss recognised in the year Past Service Cost Losses/(Gains) on Acquisition/Divestiture Net Gratuity Benefit expense Balance Sheet: Details of Provision for Gratuity Benefit (Rupees) As on Dec 31,2010 Present value of funded obligations Fair value of plan assets Net Liability 122,357,703 (54,956,729) 67,400,974 As on Dec 31,2009 59,956,960 (51,514,412) 8,442,548 16,653,546 4,774,974 (3,794,502) 39,908,371 4,105,740 (170,956) 61,477,173 Year Ended Dec 31,2009 14,085,580 3,128,810 (2,845,210) 4,109,140 18,478,320
Changes in the present value of the defined benefit obligation are as follows: Opening Defined Benefit Obligation Current Service Cost Interest Cost Plan Amendments Actuarial (gain)/loss Liabilities assumed on acquisition/(Settled on Divestiture) Benefits paid Closing Defined Benefit Obligation Changes in the fair value of plan assets are as follows: Opening Fair value of plan assets Expected return on plan assets Actuarial gain/ (loss) Contribution by employer Asset acquired on acquisition Benefits paid Closing Fair Value of Plan Assets 51,514,412 3,794,502 2,980,714 5,835,906 2,066,199 (11,235,004) 54,956,729 25,723,052 2,845,210 (1,479,890) 31,236,680 (6,810,640) 51,514,412 59,956,957 16,653,548 4,774,974 4,105,740 42,889,085 5,212,394 (11,234,995) 122,357,703 46,923,957 14,085,580 3,128,810 2,629,250 (6,810,637) 59,956,960
Details of experience adjustment on plan assets and liabilities are as follows : (Rupees) As on As on As on As on Dec 31, 2007 Dec 31, 2008 Dec 31,2009 Dec 31,2010 Experience adjustment on plan assets Experience adjustment on plan liabilities 853,712 2,802,726 3,523,032 (299,664) (1,479,840) (3,207,220) 3,581,797 (40,991,052)
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SCHEDuLES
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: (Rupees) Year Ended Dec 31,2010 Investment with Insurer Actual return on plan assets (Based on interest rate declared by the insurer as at 31st March 2010/2009) that date, applicable to the period over which the obligation is to be settled. The principal assumptions used in determining Gratuity for the Groups plans is as below: (Rupees) Year Ended Dec 31,2010 Discount Rate Estimated rate of return on plan assets Expected Employee Turnover Age : 21-44 Years Age : 44-57 Years Expected Employers Contribution next year 6.50% 6.00% 35,000,000 6.50% 6.00% 33,000,000 8.20% 7.50% Year Ended Dec 31, 2009 8.20% 7.50% 100% 9.25% Year Ended Dec 31, 2009 100% 9.30%
The overall expected rate of return on assets is determined based on the market prices prevailing on
With respect to foreign subsidiaries Gratuity and other retiral benefits are provided as per local statute. 11. The accounts of India Index Services and Products Limited is unaudited and the financial statements (excluding notes to accounts) as certified by the management, have been considered in these consolidated financial statements. 12. CRISIL Limited sold balance 10% stake in Gas Strategies Group Limited in September 2010. 13. During the Current Year company has initiated a hedge programme to mitigate foreign exchange (forex) related risk. Initially the hedge programme covered only forex receivable for which CRISIL followed AS 11 Accounting for the Effects of Changes in Foreign Exchange Rates. However, at the later part of the year, CRISIL has increased the hedge programme to cover forecasted revenue as against receivable as a part of risk management strategy. Accounting for revenue hedge is done as per guidelines prescribed under AS 30 Financial Instruments: Recognition and Measurement wherein mark to market on forward contracts are routed through hedging reserve account
Forward Contract Outstanding as at 31st December 2010 : Currency uSD GBP EuR Amount 16,000,000 6,000,000 3,000,000 Amount in INR 752,973,336 442,547,500 187,153,750
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SCHEDuLES
14. In accordance with Sec 77A, 77AA and 77B of the Companies Act,1956 and pursuant to the buy back announcement made by the Company on September 9, 2010 the Company has bought back from the open market through stock exchanges 128,156 equity shares of Rs. 10 each during the year for a total consideration of Rs.796,858,024 which have been subsequently extinguished. Consequently, an amount of Rs.1,281,560 being the nominal value of equity shares bought back has been transferred to Capital Redemption Reserve Account from General Reserve. An amount of Rs. 474,890,071 being the premium on buy back has been appropriated from Securities Premium. An amount of Rs. 320,686,393 being the balance premium on buy back has been appropriated from General Reserve. The Board of Directors, at its meeting held on September 9, 2010 approved the buyback of equity shares of the Company. 18. Previous year comparatives Previous years figures have been regrouped where necessary to conform to current years classification. 15. On 3rd December 2010, CRISIL Limited acquired 100% ownership in Pipal Research Analytics and Information Services India Private Limited. 16. Prior period item includes gratuity expense Rs.27,444,953 (net of tax). 17. CRISILs subsidiary in Poland has received an in principle approval for sanction of grant amounting to Rs. 78,344,920 . The grant has been awarded under Operational Program - Innovative Economy scheme and will be available to the Company over a period of 5 years, subject to fulfillment of certain conditions.
As per our report of even date. For S.R. BATLIBOI & CO. Firm Registration No.: 301003E Chartered Accountants per Shrawan Jalan Partner Membership No.: 102102 Mumbai, February 14, 2011 Roopa Kudva Managing Director & Chief Executive Officer Shrikant Dev Company Secretary Mumbai, February 14, 2011 H.N. Sinor Director Rama Bijapurkar Director Thomas Schiller Director B. V. Bhargava Director For and on behalf of the Board of Directors of CRISIL Limited
109
110
(Rupees) CRISIL Irevna Argentina S.A. CRISIL Irevna Poland Sp.Zo.o. Irevna Limited, uK Irevna LLC, uS Pipal Research Analytics and Information Services (I) Pvt. Ltd. 10,000 Equity Shares of Rs.10 each, fully paid up (60,284,539) 175,241,305 175,241,305 790,231 1,138,492,963 (5,358,994) 203,067 (5,562,061) 552,732 651,876,431 1,242,566 494,068 748,498 (19,186,758) 59,252,084 59,252,084 28,694,455 2,878,489 2,878,489
Statement pursuant to details to be furnished for subsidiaries as prescribed by the Ministry of Corporate Affairs
SCHEDuLES
1.
Name of the subsidiary company
CRISIL Risk and CRISIL Credit Infrastructure Solutions Information Limited Services Limited
2. 741,072 Equity Shares of ARS 1 each, fully paid up 100 Equity 2,056,000 Shares of PLN Equity Shares of 500 each, fully of 1 each, fully paid up paid up 3,361,835 16,096,823 16,096,823 33,488,498 2,715,148 675,558 2,039,590 (4,906,591) 2,189,273,877 2,189,273,877 15,447,452 39,214,853 39,214,853 95,257,546 11,676,009 6,443,814 5,232,195 -
Share Capital
49,999,900 Equity Shares of Re.1 each, fully paid up (94,556) 416,474 416,474 (11,085) (11,085) -
50,000 Equity Shares of Rs.10 each, fully paid up
1 Equity Share of uS$ 200 each, fully paid up
3.
Reserves & Surplus
217,117,140
4. -
Total Assets
398,780,704
5.
Total Liabilities
398,780,704
6.
Investments
7.
Turnover
520,116,753
8.
Profit/(Loss) Before Taxation
73,541,009
9. -
Tax Expense
23,287,006
10. Profit After Taxation
50,254,003
11.
Dividend Paid
For and on behalf of the Board of Directors of CRISIL Limited H.N. Sinor Director Shrikant Dev Company Secretary Thomas Schiller Director
Rama Bijapurkar
B. V. Bhargava
Director
Director
Roopa Kudva
Managing Director & Chief Executive Officer
Mumbai, February 14, 2011
notICe
NOTICE is hereby given that the Twenty-fourth Annual General Meeting of the members of CRISIL Limited (the Company) will be held on Friday, April 15, 2011 at 3.30 pm at Rangaswar Hall, 4th floor, Yashwantrao Chavan Pratishthan, Gen Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai 400021, to transact the following business:
ORDINARY BuSINESS
1. To receive, consider and adopt the audited Profit & Loss Account of the Company for the year ended December 31, 2010 and Balance Sheet as at that date, together with the Report of the Board of Directors and Auditors thereon. 2. To confirm the payment of interim dividends on the Equity shares for the year ended December 31, 2010 and declare final dividend for the year 2010 on equity shares. 3. To appoint a Director in place of Mr. B.V. Bhargava, who retires by rotation and, being eligible, offer himself for reappointment. 4. To appoint a Director in place of Dr. Nachiket Mor, who retires by rotation and, being eligible, offer himself for reappointment. 5. To consider and if thought fit, to pass, with or without modification, the following resolution, as an Ordinary Resolution: RESOLVED that Messrs S.R. Batliboi & Co., Chartered Accountants, be and are hereby re-appointed Auditors of the Company to hold office from the conclusion of this Meeting until the conclusion of the next Annual General Meeting of the Company on such remuneration as may be decided by the Board of Directors.
By Order of the Board For CRISIL Limited Shrikant Dev Mumbai, February 14, 2011 Company Secretary
111
notICe (contd.)
NOTES:
1. 2. 3. 4. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. A proxy form duly completed, stamped and signed should reach the Registered Office of the Company not less than 48 hours before the time of the Annual General Meeting. The Register of Members and Share Transfer Books of the Company will remain closed from Wednesday, March 16, 2011 to Thursday, March 17, 2011 (both days inclusive). Members are requested to note that the Companys shares are under compulsory demat trading for all investors. Members are, therefore, requested to dematerialise their shareholding to avoid inconvenience. Dividend as recommended by the Board of Directors, if declared at the Annual General Meeting, shall be paid: (i) to those Members whose names appear on the Register of Members of the Company after giving effect to all valid transfers in physical form lodged with the Company and its Registrar and Transfer Agents before Tuesday, March 15, 2011; and In respect of shares held in electronic form, on the basis of beneficial ownership as per the details furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) at the close of business hours on Tuesday, March 15, 2011.
5.
(i)
6.
In accordance with the provisions of Section 205A of the Companies Act, 1956, the Company shall transfer the unclaimed dividend relating to the financial year 2003-2004 to the Investor Education and Protection Fund of the Central Government after the expiry of seven years from the date of transfer to unpaid dividend account. Members who have a valid claim to the said unclaimed dividend may claim the same from the Company before the transfer takes place. The Company has obtained an exemption from the Ministry of Corporate Affairs for publication of the Accounts of its subsidiaries under the provision of Section 212 of the Companies Act, 1956. The accounts of the subsidiary companies, therefore, are not separately included in the Annual Report. However, the consolidated financial statements, duly audited by the Statutory Auditors, include accounts of subsidiary companies. The Accounts of subsidiary companies and other detailed information will be made available to the investors seeking information at the Companys Registered Office. All the documents referred to in the Notice and Explanatory Statement will be available for inspection by the Members at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days from the date hereof upto the date of the Meeting. Pursuant to Clause 49 of the listing agreement with the stock exchanges, the following information is furnished about the Directors proposed to be appointed/re-appointed.
7.
8.
ITeM NO. 3
Dr. Nachiket Mor, Director, retires by rotation and being eligible, offers himself for re-appointment. A brief resume of Dr. Nachiket Mor is given below: Dr. Nachiket Mor is a Yale World Fellow; has a Ph.D. in Economics from the university of Pennsylvania with a specialization in Finance from the Wharton School; an MBA from the Indian Institute of Management, Ahmedabad; and an undergraduate degree in Physics from the Mumbai university. While completing his Ph.D., he was associated with a Philadelphia based hedge fund (Quantitative Financial Strategies) for three years. He has worked with ICICI from 1987 to 2007 in a variety of jobs, including Corporate Planning, Project Finance, Rural Finance and Treasury and was a member of its Board
112
of Directors from 2001 to 2007. From October 2007 to August 2010, he assisted ICICI in setting up a philanthropic foundation, the ICICI Foundation for Inclusive Growth and served as its founding President. He is now the Chairman of the Boards of Sughavazhvu Health Care, CARE India and IFMR Trust and is closely involved in the evolution of these three organizations. Dr. Nachiket Mor is currently also an independent member of a few other Boards including IKP Trust; IKP Centre for Technologies in Public Health; IKP Centre for Advancement in Agricultural Practice; and the Institute for Financial Management and Research. In the past he has served as the Chairman of the Fixed Income Money Market and Derivatives Association of India for two years and as a Board Member of Wipro Limited for five years. He is a member of the Audit Committee and Chairman of the Allotment Committee of CRISIL Limited. He does not hold any share in the Company. The Board considers it in the interest of the Company to appoint Dr. Nachiket Mor as a Director. None of the Directors, except Dr. Nachiket Mor, is interested or concerned in this Resolution.
ITeM NO. 4
Mr. B.V. Bhargava, Director, retires by rotation and being eligible, offers himself for re-appointment. A brief resume of Mr. B.V. Bhargava is given below: Mr. B.V. Bhargava has been associated with CRISIL since 1992, and has been Chairman from May 1999 to July 2008. He is also Chairman of CRISILs Rating Committee. He was associated with ICICI Limited for three decades, and retired as Vice-Chairman and Managing Director in 1996. He was associated with the Tariff Commission of India and the Indian Investment Centre, New York. He is currently on the Board of ICICI Lombard General Insurance Company Limited, Supreme Industries Limited, Grasim Industries Limited, J.K. Lakshmi Cement Limited, Excel Crop Care Limited, L&T Infrastructure Finance Limited, Grasim Bhiwani Textiles Limited, Lakshmi Precision Screws Limited, L&T Finance Holdings Limited and Maxx Mobile Communications Limited. He is member of the Audit Committee of CRISIL Limited, L&T Finance Holdings Limited and Chairman of the Audit Committee of J.K. Lakshmi Cement Limited, Grasim Industries Limited, Excel Crop Care Limited and Grasim Bhiwani Textiles Limited. He is also the Chairman of Investors Grievance Committee of CRISIL Limited and member of the Investors Grievance Committee of Maxx Mobile Communications Limited. Mr. B.V. Bhargava does not hold any share in the Company. The Board considers it in the interest of the Company to appoint Mr. B.V. Bhargava as a Director. None of the Directors, except Mr. B.V. Bhargava, is interested or concerned in this Resolution.
By Order of the Board For CRISIL Limited Shrikant Dev Company Secretary
Mumbai, February 14, 2011 Registered Office: CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai 400076.
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CRISIL LOCATIONS
ReGISTeReD OFFICe CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai-400 076 Tel : + 91-22-3342-3000 Fax : + 91-22-3342-3810 CIty oFFICe unit no 104 & 201, Kensington A wing-lT/ITES SEZ, Hiranandani Business Park, Powai, Mumbai-400 070 Tel : + 91-22-4047-2100 Fax : + 91-22-4047-2045 ReGIONAL OFFICeS Ahmedabad unit No.706, 7th Floor, Venus Atlantis, Prahladnagar , Satellite, Ahmedabad-380 015 Tel : + 91-79-4024-4500 Fax : + 91-79-4024-4520 Bengaluru W-101, 1st floor, Sunrise Chambers, 22, ulsoor Road, Bengaluru-560 042 Tel: + 91-80-4244-5399 Fax: + 91-80-4244-5300 Pipal Research Analytics & Information Services India Pvt. Ltd. Sharma Complex, Office No. 415, 2nd floor, 1st Block, Matadahalli, R.T. Nagar Main Road, Bengaluru-560 032 Chennai Thapar House, Mezzanine Floor, No 37 Montieth Road, Egmore, Chennai 600 008. Tel : + 91-44-2854-6205 / 06 Fax : + 91-44-2854-7531 Bascon Futura IT Park 8th floor, 56 L, Venkatnarayana Road, T. Nagar, Chennai - 600 017 Tel : + 91-44-4226-3400 Fax : + 91-44-4226-3001 new Delhi The Mira, G-1, 1st Floor, Plot No.1 & 2, Ishwar Nagar Near Okhla Crossing, New Delhi-110 065 Tel : + 91-11-4250-5100/ 2693-0117 Fax : + 91-11-2684-2212 (Ratings) + 91-11-2684-2213 (Infrastructure Advisory) CRISIL Irevna Poland Sp. Z.o.o poland Renaissance Business Centre, 6th Floor, ul. witego Mikoaja 7 50-125 Wrocaw, Tel : + 48-71-324-1720 The Oval No.10 & 12 (57 & 58), Venkatnarayana Road, T. Nagar, Chennai-600 017 Tel : + 91-44-4226-3000 Fax : + 91-44-4226-3001 TVH -Beliciaa Towers 3rd Floor, Tower II, Block No.94, MRC Nagar Chennai-600 028 Tel : + 91-44-4226-3400 Fax : + 91-44-4226-3001 Gurgaon Pipal Research Analytics & Information Services India Pvt. Ltd Plot no- 23, Sector- 18, H.S.I.D.C. Maruti Industrial Area, Gurgaon-122 015, Haryana Tel : + 91-124-460-5400 Fax : + 91-124-560-5505 Hyderabad Uma Chambers, 3rd floor, Plot no. 9 & 10 Nagarjuna Hills, Near Punjagutta Cross Road, Hyderabad-500 082 Tel : + 91-40-2335-8103 / 05 Fax : + 91-40-2335-7507 Kolkata Horizon, Block-B, 4th Flr, 57, Chowringhee Road, Kolkata-700 071 Tel : + 91-33-4011-8200 / 28 Fax : + 91-33-2283-0597 Pune CRISIL Limited, 1187/17, Ghole Road, Shivajinagar, Pune-411 005 Tel : + 91-20-4018-1900 + 91-20-2553-9064/67 Fax : + 91-20-4018-1930 OVeRSeAS OFFICeS IREVNA LIMITED London #33 Throgmorton Street, London EC2N 2BR uK, Tel : + 44-870-333-6336 Fax : + 44-(0)20-156-5001 IREVNA LLC. New York 1560 Broadway, 10th Floor, New York, New York 10036.u.S.A Tel : + 1-877-747-3862 Tel : (Outside uSA) : + 1-646-292-3520 Fax : + 1-646-292-3521 www.irevna.com Chicago 601 W. Randolph, Suite 400, Chicago, IL 60661 CRISIL Irevna Argentina SA Argentina Av. del Libertador 1969. 2nd Floor B1638BGF Olivos Provincia de Buenos Aires Argentina Tel : + 5411-4837-7600 Fax : + 5411-4837-7667 www.irevna.com.ar
114
Registered Office: CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai 400076.
proXy ForM
Regd. Folio No................................................ No. of Shares held .............................................
I/We........................................................................................................................................................................................................... of .................................................................................................... being member/members of CRISIL LIMITED hereby appoint Mr./Ms. ...........................................................................................of .................................................................................................................or failing him Mr./Ms............................................................. of ...................................................................................................................... as my/our/proxy to vote for me/us on my/our behalf at the TWENTY FOuRTH ANNuAL GENERAL MEETING of the Company to be held on Friday, April 15, 2011 at 3.30 p.m. at Rangaswar Hall, 4th floor, Yashwantrao Chavan Pratishthan, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai 400021. Revenue stamp of 15 paise Signed this ................. .......... day of .............................................2011. Signature ..............................
Note : This form, duly completed and signed, must be deposited at the Registered Office of the Company not less than 48 hours before the time of the meeting.
CrISIL LIMIteD
Registered Office: CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai 400076.
ATTeNDANCe SLIP
(To be handed over at the entrance of the meeting hall) 24th Annual General Meeting April 15, 2011 I hereby record my presence at the TWENTY FOuRTH ANNuAL GENERAL MEETING of the Company held on Friday, April 15, 2011 at 3.30 p.m. at Rangaswar Hall, 4th floor, Yashwantrao Chavan Pratishthan, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Mumbai 400021. Full Name of the Member (in BLOCK LETTERS) ....................................................................................................................................... ...................................................................................................................................................................................................................... Regd. Folio No..........................................................................................No. of Shares held ..................................................................... Full Name of the Proxy (in BLOCK LETTERS) ........................................................................................................................................... Members/Proxys Signature.........................................................................................................................................................................
Printed on 100% recycled paper.
CRISIL Limited CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai - 400 076. India. Phone: +91 (22) 3342 3000 www.crisil.com | www.standardandpoors.com
Printed at GP Offset Pvt Ltd

2010 Annual Report Crisil

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2010 Annual Report Crisil

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Ready for the next level.

17,500 SME Irevnas

footprint in the global corporate sector. Firmly positioned

Polish and Argentinian

are Irevnas clients. Strong growth in

mark in credit ratings.

top 6,000 the worldsPolish15 investment in banks

function better globally.

For more details visit www.crisil.com

14 - Corporate Sustainability Initiatives

CRISIL - MAKING MARKETS FUNCTION BETTER

Ready for the next level.

How We Add Value

GLobaL ReSeaRCH & anaLytICS Irevna Pipal Research

CRISIL InfRaStRuCtuRe aDvISoRy

GLobaL anaLytICaL CentRe

CRISIL RISk SoLutIonS

* Wholly-owned subsidiary - CRISIl Risk and Infrastructure Solutions limited

Ready for the next level.

Highest number of outstanding SME ratings in India.

Client list includes 30 fortune 500 companies, across a range of industries.

CRISIl buSIneSSeS (contd.)

Provides coverage industries.

90% of Indias commercial banks are our customers.

Ready for the next level.

CRISIL RISk AND INFRASTRuCTuRE SOLuTIONS (CRIS)

CRISIl CONSOlIDATED ten yeaR fInanCIaL HIGHLIGHtS

pRofIt afteR taX

(Rs. per share)

3212 2663 1773 70 25 6.5 10 10 12.5 15 10

Ready for the next level.

net WoRtH peR SHaRe

223 195 280 200 165 146 110 126 383

RetuRn on net WoRtH

Revenue peR eMpLoyee

pat peR eMpLoyee

29.35 28.94 27.20 25.57 22.93 7.59 7.80

22.12 21.53 20.15 19.26 19.96

5.17 4.79 4.36 4.34 3.14 3.50 3.80

CRISIL and S&P seminar, The New Normal, Mumbai

CRISIl knowledge partner at the India PPP Conclave, Delhi

Ready for the next level.

CRISIl and NSE seminar: Independent Equity Research, Mumbai

CRISIl Real Estate Star Ratings launch, Mumbai

2. Insight into Risk - Pharmaceuticals Sector

3. Insight into Risk - CRISIl Default Study 2009

4. Insight into Risk - Housing Finance Sector

6. City Real(i)ty Report

7. Urban India Construction Reports

Ready for the next level.

CRISIl Research (contd.)

9. Skilling India: The Billion People Challenge

10. India: Raising the Growth Bar

CRISIl Infrastructure Advisory

13. PPP Online Toolkit and Compendium

CORPORATE SuSTAINABILITY InItIatIveS

INClUSIVE GROWTH FOR SMEs

Ready for the next level.

MAKING AND FACIlITATING DONATIONS

of-the -art, eco- friendly

CRISIl House, the

Balanced growth includes social responsibility, a

en key element of CRISIls erg y- corporate philosophy. eff ic ient